Pakistan, China firms sign accord for vessels, funding to boost shipping sector

Pakistan has signed a memorandum of understanding (MoU) with China’s Shandong Xinxu Group to deepen cooperation in ship leasing, sales and crew management, marking what officials described as a “new chapter” in maritime collaboration between the two countries.

The agreement between the Pakistan National Shipping Corporation (PNSC) and the Chinese firm is part of Islamabad’s broader push to modernize its shipping industry to enhance seaborne trade, Maritime Affairs Minister Muhammad Junaid Anwar Chaudhry said during the signing ceremony in Islamabad on Thursday.

“This agreement marks the beginning of joint development,” Junaid Chaudhry said and added “It will strengthen Pakistan’s role in the growth of the shipping industry and create an enabling environment for further investment in the maritime sector.”

Under the MoU, the Chinese company has principally agreed to provide capital and vessels to PNSC, with cooperation covering ship acquisition, leasing, marketing and operational services.

Key areas outlined in the MoU include the acquisition of cargo vessels, such as liquid bulk, dry bulk, and containerized ships, under joint ownership, individual ownership, or profit-and-loss sharing arrangements.

The agreement also covers the chartering of vessels by Xinxu to PNSC under various models, including time charter, spot charter, or bareboat charter agreements, the notification issued to the local bourse.

Additionally, PNSC may provide commercial, technical, and administrative management services for the vessels, encompassing chartering, marketing, crewing, maintenance, and regulatory compliance.

These services may be compensated through fixed or variable management fees, or profit-sharing models.

Furthermore, Xinxu may offer financing to PNSC in local or foreign currencies to support investments in ships and floating platforms. Such financing would be provided on competitive commercial terms.

The PNSC disclosed the development in its notice to the Pakistan Stock Exchange (PSX) on Thursday. “PNSC signed a non-committal MoU with Shangdong Xinxu Group Corporation Company, (a company formed and existing under the laws of China) for 12 calendar months.
“This MoU establishes a relationship of mutual cooperation and trust between the parties for the objective of commercial benefits to each party and to create favourable conditions for investments primarily in the maritime sector of Pakistan and to explore business opportunities of mutual interest in international shipping sectors,” read the notice.

The announcement comes just days after Pakistan halved port charges at Karachi Port, the country’s largest deep-sea facility, as part of a series of reforms aimed at cutting logistics costs and supporting low-emission, climate-resilient maritime practices.

“By lowering operational costs and streamlining logistics, we are not only boosting trade competitiveness but also contributing to climate resilience,” Junaid Chaudhry said over the weekend.

The ministry has also decided to deploy technologies such as artificial intelligence and drones to monitor port activity and reduce container dwell times by up to 70 percent.

Shandong Xinxu is one of several Chinese firms expanding investment in Pakistan under the multibillion-dollar China-Pakistan Economic Corridor (CPEC) cooperation.

Shandong Xinxu Group, located in Shandong Province, China, provides products to companies in the battery industry and forklift industry.

Reporter Hashir Ahsan