China builds 1st large luxury cruise liner

China on Wednesday began construction on its first large luxury cruise liner, which is included in a package of projects aimed at boosting the tourism and shipping industries of a coastal city whose ports are primarily used to handle manufactured goods for export.

The Southeast China International Shipping Center package includes 10 projects led by the construction of a 100,000-ton luxury cruise liner, a cruise terminal and a shipping business center in the city of Xiamen, local officials said. The combined investment tops 16.73 billion yuan ($2.63 billion), they added.

The design and construction of the luxury cruise liner alone is estimated to cost 3.1 billion yuan. Leading international design firms will be invited to participate, said Lin Shilin, an industry and investment official with Xiamen's Haicang district.

Lin said it would take at least 47 months to build such a large luxury cruise liner, which will be capable of carrying more than 2,000 passengers upon completion. A local media report had previously stated that the cruise liner, which will be named "Xiamen, China", was not likely to test water until 2018.

According to officials, the cruise liner will be operated by a subsidiary of Beijing-based Shan Hai Shu Group, a conglomerate that has a cruise tourism development partnership with US-based Royal Caribbean International.

"With our own cruise liner, it will be easier to design cruise routes and develop our own tourism products," said Huang Ju, chief operational officer of the subsidiary of Shan Hai Shu.

Kang Tao, deputy mayor of Xiamen, said the infrastructure projects announced Wednesday are key to promoting the city as a future shipping hub in Southeast China, and they are expected to lead the economic growth of the region.

The cruise industry is part of Xiamen's economic "structural reform" to shift focus to domestic consumption - particularly among the booming middle class - to spur economic growth.

"The cruise industry gives Xiamen's struggling shipbuilders a good chance to move up the industry value chain by focusing on building luxury cruise ships," said Chen Yumin, an official with Xiamen Shipbuilding Industry Co Ltd, which is tapped to participate in the project.

Huang Guobin, head of Xiamen's tourism bureau, said the city will also partner with global cruise tourism operators to build a world-class shopping and entertainment cluster on the cruise terminal that aims to have the greatest number of luxury stores in the world.

The location designated to host the "Cruise City" is known as the city's industrial port belt, and it housed the offices of shipping firms, small trading companies, factories and workers' dormitories in the first two decades of the country's reform and opening-up reforms that started in the late 1970s.

Xiamen, named one of the five special economic zones then, was mostly known for its concentration of export-oriented factories. Tourism only recently took off and put the city among China's top leisure and relaxation destinations.

"In another five years, people arriving in Xiamen on cruises can have as much fun in the 'Cruise City' as they do in Las Vegas," local media proclaimed.

Booming industry

"Cruise travel is becoming the new form of tourism favored by Chinese," Zheng Weihang, an official with China Communications and Transportation Association, said on a recent cruise forum held in the northern port city of Tianjin.

According to the association, more than 504,500 people left or arrived at Chinese ports on cruises last year. Meanwhile, more than 142 cruise ships sailed from coastal China to international destinations, up 49.5 percent from a year earlier.

In Tianjin alone, industry observers estimate the number of tourists taking cruises could grow by six or seven times in the coming decade.

"Globally, the cruise industry's market is shifting its focus from the developed world to emerging markets like China," an industry observer said. "More Chinese are getting to know that a cruise ship is more of a floating five-star resort than a transportation tool."

Zheng said there are about 300 cruise ships in service around the globe. Every large cruise ship can take around 2,000 to 6,000 people on board. Their daily consumption is already a huge market for the service industry.

He said that, globally, cruise operators are eyeing direct partnerships with Chinese manufacturers for supply.

Hu Shuren, deputy head of the planning and budget department of National Tourism Administration, said the government is drafting a development plan for cruise tourism, which is considered a focus of the emerging forms of tourism the central government intends to foster in the near future.