China Shipbuilding to raise $1.8 billion for naval build-up
HONG KONG/BEIJING (REUTERS) - State-backed China Shipbuilding Industry plans to raise up to US$1.4 billion (S$1.8 billion) through a private share sale to buy assets used for building warships, the first time Beijing is tapping the capital market to fund its military expansion.
The move comes as China creates its own military-industrial complex, with the private sector seen taking a key role, as the country gains a new sense of military assertiveness and deals with a growing budget to develop modern equipment including aircraft carriers and drones.
China, whose military spending is now second only to the United States, has unveiled a double-digit rise in its 2013 military budget, with spending on the People's Liberation Army set to rise 10.7 per cent to 740.6 billion yuan (S$154 billion).
"The thinking of those high-ranking officials is changing. Military asset securitisation, or tapping capital markets for military expansion, will be the future trend and the funding scale will also become bigger and bigger," said Wang Hexu, a Shanghai-based analyst at Hwabao Securities.