Internationalization Path Selection Of Chinese Shipping Industry

With the accelerated integration of the shipping market,the industry is caught in a vicious circle of continuous excess capacity and declining growth rate of shipping volume.In the case of limited development,large traditional shipping industry at home and abroad has a new round of alliances and reorganizations to reverse the dilemma.COSCO SHIPPING was established,MSK absorbed Hamburg Süd,MOL,NYK and K Line formed ONE.Hanjin Shipping declared bankruptcy.Mergers and acquisitions have occurred one after another.Shipping alliances have been reorganized several times.The maritime market is becoming more and more concentrated.The market structure is increasingly oligopolistic.In order to further promote the development of shipping industry,this paper makes an in-depth study on the internationalization path of COSCO SHIPPING.The international development of the shipping industry is to expand the competitive advantage in the global market.The overseas investment of Chinese shipping enterprises is no longer just facing the competition in the local market,but participating in the battle for the global shipping market share.The companies often enter the host country by way of route agent and setting up overseas office.And they work with local companies to occupy overseas markets through cooperation or joint ventures.Finally,they set up wholly-owned subsidiaries or greenfield investment to control the global routes.The evolution of shipping internationalization path can be simplified as: network layout-local operation-global operation-alliance construction-merger and reorganization-alliance reconstruction.In a highly concentrated market,oligarchs have formed alliances.Enterprises quickly acquire actual control through mergers and reorganizations,which leads to the collapse of the alliance.It's a dynamic equilibrium.According to the output game analysis,the members can get more benefits after forming alliance.If all members are equal in strength,the maximum added value of their respective profits is achieved when the number of alliance members is 4.Only same oligarchs can sustain long-term alliances,and alliances of comparable size can compete with each other.According to the price game analysis,mergers and reorganizations,especially between large enterprises,can bring greater profits.The trend of merger and reorganization is the inevitable result of the pursuit of welfare maximization.According to the evolutionary game analysis,alliances or mergers in the market are stable and limited.The market share of the existing alliance is maintained at about 80%.There are still a large number of competitive SMEs in the market.The internationalization of China's shipping industry has three levels: "going out","going in" and "going up".In order to "going up",COSCO SHIPPING should evaluate the situation and achieve overseas regional management while avoiding excessive expansion.In the current shipping market situation,for most powerful shipping industries,the opportunity to "go in" is the large-scale infrastructure construction projects in the “B&R” initiative.In order to "going out",SMEs should expand the operation scale and market share,reduce resource consumption and homogenization of competition and avoid being swallowed.The general trend of shipping industry is to integrate internal and external resources of enterprises to establish industrial alliances.