China to raise subsidies for scrapping ships

China, the world's largest shipbuilder, is going to raise ship-scrapping subsidies by 50 percent to cut overcapacity and reduce emissions from old vessels.

According to a statement published by the Ministry of Transport on Monday, China will offer cash subsidies of 1,500 yuan ($250) per gross metric ton to shipping companies that scrap their vessels before their operational expiration dates.

Ship owners will receive 50 percent of the cash subsidies upon scrapping their vessels and the other 50 percent when a new replacement vessel is built.

All old vessels scrapped between 2013 and 2015 are qualified to apply for subsidies.

The new policy is seen as a stronger push to replace old energy-consuming vessels in China with new environmentally friendly ones. According to the policy in 2011, 1,000 yuan in cash subsidies per gross ton were handed out and ship owners could only receive the subsidies after buying a new vessel.