Challenges |
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Inflation added $2.5 m to yards’ costs | Lack of infrastructure | Lack of Yard managers | Increasing labor cost | Higher interest rates |
No subsidies | Delayed supply of materials (3 - 5 months; 1 m RMB loss) | Lower Yards’ productivity (improving) | Building prices fell by max. 40% (1980-85); rose in 1988 | Exchange rate: 1$ = 8 RMB; yards lost $12.5 m due to devaluation (1986) |
Taxes: +$1.5 m (1988) | Power supply: 1/2 of what required; loss of 5 m RMB p.a. | Delayed main engines delivery | Stock control: required; reduction of material wastage required | Ship equipment: covering up to ½ of ship’s cost had to be reduced |
Delayed delivery of ship equipment-imported from Japan & had to be D.O.T. approved | Longer construction time: Japan & S Korea delivered ships from 5 to 6 months earlier than China |
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