World shipyards have seen their order books double to about US$350 billion this year from 2007, as bank loans shrank to US$187 billion in 2008 from US$346 billion in 2006, according to data from Nordea Bank. Chinese bank portfolios stood at around US$50 billion, the bank said, citing a Bank of China estimate.

"We need more money from Chinese banks," Georg A. Whist, Singapore-based general manager with Nordea, said today at a conference. "The bank capacity was never there to finance that order book. Asian banks need to further increase funding to Asian owners."

Banks have curbed lending because of increased risk as shipowners struggle to obtain funding for new vessels. The International Monetary Fund expects world trade volume in goods and services to shrink 11.9 percent this year before rebounding 2.5 percent next year.

CMA CGM SA, the world's third-largest container shipping line, is seeking equity investors to reduce US$5.6 billion of debt, according to three people briefed on the plan. Hapag-Lloyd AG, another container line, has been cleared to get German government loan guarantees.

Financing tough

"It's extremely difficult to get ship finance at all at the moment because as you can imagine from the order book situation many banks already have very significant exposure to shipping," Richard Hext, chief executive officer of Pacific Basin Shipping Ltd., said in an interview today. Banks "are unwilling to further increase that exposure."

Keith Denholm, director of PCL Shipping Pte, cautioned that China's involvement may not help fix the financing problems.

"The Chinese banks are already getting involved as part of their protectionistic measures to safeguard their workforce and employment of the industries around the shipyards," Denholm said. "These protectionistic measures are aggravating the situation and supply isn't going to be curtailed."