China Scuttling P3 Pact Seen to Prolong Shipping Slump

By Clement Tan

June 20 (Bloomberg) — China rejected a global shipping alliance to protect companies navigating a choppy market. The decision will probably hurt cargo firms’ earnings, including its own.

The Commerce Ministry’s June 17 announcement spiking a deal between the world’s top three container carriers — known as the P3 and led by Copenhagen-based A.P. Moeller-Maersk A/S (MAERSKB) — may undermine recovery in an industry still reeling from the 2008 financial crisis. Overcapacity and low charter rates are likely to stay, jeopardizing earnings, including at China Cosco Holdings Co. (1919) and China Shipping Container Lines Co. (2866), the country’s two biggest.

China’s move “is a hollow victory for Asian liners,” said Paul Dewberry, an analyst at Bank of America Corp.’s Merrill Lynch, in a June 17 note. “This commoditized, fragmented and loss-making industry is in need of P3-type development to force consolidation. The resulting abandonment of P3 by its members will ultimately only prolong the current industry slump.”

Maersk, Mediterranean Shipping Co. and CMA CGM SA agreed last June to establish an operational pact with the aim of reducing costs on Asia-Europe, trans-Atlantic and trans-Pacific routes. Container lines have been battling industry overcapacity after a boom in ship orders collided with the global financial crisis, triggering the worst slump in prices for the carriage of cargo since containerization became global in the 1970s.
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Tiananmen Vigil Draws Hong Kong Crowds 25 Years After Crackdown

By Clement Tan and Natasha Khan

June 4 (Bloomberg) — A candlelight vigil in Hong Kong to mark the 25th anniversary of the 1989 Tiananmen Square crackdown drew at least 100,000 people last night to honor the memories of the student-led pro-democracy protesters.

Visitors to the event at Victoria Park were greeted with loudspeakers broadcasting slogans and banners demanding an end to the rule of the Chinese Communist Party. A human-sized Goddess of Democracy statue stood in the park, where many sat. As night fell, hundreds lit candles and observed a moment of silence at 8:38 p.m. after organizers placed wreaths to commemorate those who lost their lives.

The anniversary has struck a chord with many in Hong Kong amid a city-wide debate about implementing universal suffrage to elect its leader by 2017. A record 180,000 people attended the vigil, Lee Cheuk-yan, chairman of organizer Hong Kong Alliance in Support of Patriotic Democratic Movements of China, told the crowd. Police estimated turnout at 99,500 people.

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