Past and Present of Chinese Classification Society

In the early days of new China, ship surveys by new China were not admitted by the international community. New China’s ocean ships could do nothing but used the certificates issued by the Register of Shipping Soviet Union when they went through the world customs.
Today, China has leaped to be the second largest shipbuilding country producing one third of the ordered ships in the whole world. This remarkable progress bears a great relationship with CCS, which is responsible for ship survey and certification.
In the symposium of China Shipping Figures in the Past 60 Years,the reporter had a dialogue with Li Kejun, the president of CCS. According to Li, each stage of shipbuilding, from design, construction, sailing to maintenance, should be supervised by the classification society. Therefore, the classification society, as the nerve center of one person, connects to each nerve of shipping and shipment industry.
CCS has gone through a history full of difficulties. However, CCS has stood all the tests. Now, CCS not only won the recognition from the international community but also twice chaired the International Association of Classification Societies (IACS). Behind the honors are unyielding perseverance, wisdom and courage of CCS. 

Start: Ocean Ship “Guanghua” and ZC

R: What kind of role does a ship survey institute play in a country? And how was CCS started?
Mr. Li: It is well-known in the shipping industry that there is a picture in the headquarters of CCS. In this picture is the first Chinese ocean ship “Guanghua”, which bears a deep historical relationship with CCS.
In the early days of new China, there was no specialized ship survey institute in China. It was not until in Year 1951 that China began its preparation for establishing a ship survey institute. On August 1, 1956, the first specialized ship survey institute in China - Register of Shipping of the People's Republic of China (Simply called “ZC”) was officially established.  
It was experts from the Soviet Union who proposed to establish the ship survey institute. They thought that China’s transport infrastructure including railway and other land transport was very weak, which may affect the economic recovery of new China. To change this passive situation, the shipping transport should be given priority. According to the European experience, a ship survey and register institute is necessary for shipping development. Therefore, Chen Yun, director of the Finance and Economy Committee under the Government Administrative Council approved to establish ZC.
In November, 1973, Chinese government agreed to accept International Convention for the Safety of Life at Sea 1960 and International Convention on Ship Load Lines 1966. It authorized ZC to issue certificates based on the two conventions.

R: What was ZC’s first task?
Mr. Li: ZC’s first task was to issue certificate for new China’s first ocean ship “Guanghua”. However, “Guanghua” carried two certificates during sailing, one issued by China, and the other by the Soviet Union. Although “Guanghua” is a Chinese ship, it must show the certificate issued by the Soviet Union to customs overseas.
Objective: Having our own classification society to become powerful shipping nation

R: At that time ZC was not admitted by the international community. Can you tell me the reasons?
Mr. Li: In the early days of new China, China didn’t have its status in the international community. Suez Canal and Panama Canal are two crucial shipping paths in the world. At that time, the shipping administration bureaus of these two paths did not admit the tonnage certificates specially for these two canals issued by China. The reason they gave was that ZC was a governmental organ and classification societies were internationally regarded as technical authorities. Therefore, ZC’s survey technology could not be recognized by the international ship survey institutes.
This event deeply touched the early generation of ship survey personnel in China. They realized that without powerful technology and involvement into influential international shipping organizations is it impossible for China to gain status in international shipping industry. To become powerful in shipping industry and shipbuilding industry, China must have the world-class classification society.
During the implementation of the sixth “five-year plan”, we proposed the slogan of “making sound basis, enhancing the system, and going to the outside world.” Mr Qian Yongchang, the former minister of Ministry of Communication (MOC), revised it as “Strengthening the basis, enhancing the system, adapting to the overall development, facing the domestic shipping industry and going to the outside world.”
This guideline persisted for 20 years from the sixth “five-year plan” to the tenth “five year-plan. Although the leaders have been changed for several times in this period, this guideline still remains. 
In 1986, upon the approval of State Council, ZC applied to join IACS and began to function as ship nationalization register institute. Its administrative functions also remained.
Development: Bumpy journey to IACS

R: IACS is the only non-governmental organization that can formulate rules and has the observer identification in the International Maritime Organization (IMO). It is heard that CCS came across many obstacles on the road to join IACS, it is true? 
Mr. Li: CCS officially joined IACS and gained the official IACS membership in 1988. IACS is the only non-governmental organization that can formulate rules and has the observer identification of in IMO.
At that time IACS had a series of requirements for CCS. It required CCS to have survey rules and Register of Ships in English version, overseas offices, hundreds of surveyors, sufficient ship survey tonnages and a history of over 30 years. If these requirements failed to be met, the CCS’s application would be turned down.  
At that time, the chairman of Lloyd Register visited CCS for several times. Finally he drew the conclusion that CCS would not be accepted by IACS since it greatly lagged behind its overseas counterparts.
China’s reform and opening-up requires our involvement into IACS, so we actively continue our efforts. IACS announced other conditions for China’s entry. It required China to open its whole shipping industry to overseas classification societies. It required China to ban the rules such as the Chinese ships with Chinese national flags cannot be surveyed by foreign counterparts, foreign classification societies cannot enter China’s shipbuilding factory, and foreign classification societies must show boarding certificate at Chinese ports. We refused to totally agree these requirements, so we were also refused by IACS.
In 1983, IACS convened in the United States to decide China’s application by votes. The vote result was that China was not allowed a formal membership but only a backup membership. For the sake of the national esteem, CCS did not accept this treatment. Until 1988, China’s application to join IACS was finally approved in Hamburg, Germany.
　　
R: I wonder whether the situation of CCS turned in the right direction after joining IACS.
Mr. Li: Not really. After the political event in 1989, IACS began to require China to conduct quality audit. The term “Quality Audit” confused us since we didn’t know how quality can be audited. Now we have understood this term as quality evaluation. At the end of 1989 and in early 1990s, quality evaluation was not required in all industries except the space industry, so we went to Finance and Economy Committee responsible for quality certification for detailed procedures.
At the end of 1990s, we began to establish the certification system meeting ISO9000. After three years’ hard work, CCS finally passed the multinational certification of IACS in the Year 1993 and got the certificate in 1994. Actually, CCS would be dropped out of IACS if it had failed to pass the certification. However, in another perspective, the continuous requirements of IACS for CCS did promote CCS to improve its managerial expertise and further speed up the internalization of China’s ship survey industry.

Exploration: Put equal attention on maritime and terrestrial services to achieve diversified development

R: What great changes do you think the reform and opening-up policy has brought to the shipping and shipment industry in China?
Mr. Li: China has made rapid progress in its economy and raised its international status since China opened the door to the outside world 30 years ago. CCS chaired IACS twice, respectively in 1996 and in 2006. Now CCS has its own office building, R & D institutions, more overseas offices and more ship tonnages. China’s shipbuilding and shipping industry is developing by leaps and bound, covering a large market share in the international shipbuilding industry with more ship types autonomously designed and developed by China.
In 2007, CCS achieved business revenue of 1.09 billion RMB, 26.66% more than that in 2006. In 2007, there were 14.13 million newly increased tonnages of ordered nationalized ships, accounting for 83.3% of the domestic ships and 22.4% of the newly-built ships. This made the total number of nationalized ships surveyed reach 1016 (26.88 million tonnages, ship age of 14.5 years). Among all the ships, non-five-star ships cover 35.4%. We have surveyed 9285 domestic ships (13.16 million tonnages, ship age of 15.6 years). 
In maritime engineers, we have successfully developed the 3000-meter-deep submarine platforms for oil exploration, including 18 fixed platforms, 5 mobile platform and 2 FBSOs. We have surveyed a total of 202 mobile platforms, 42 fixed platforms, 14 FBSOs, over 400 maritime equipments and containers of over 5000 thousand TEUs. And we have issued 1031 authentication certificates.
In terrestrial industry, we developed 3 major business lines featuring survey of foreign ships, survey of domestic ships and survey of other industrial products and services.
Our first project in terrestrial industry was to survey the seamless steel bridge in Zhangzhou. Until now, we have surveyed over 20 bridges over the Yangtze River.
CCS has established “CCS Quality Assurance Ltd.” and “CCS Industrial Cooperation”, whose business covers large-scale port machinery industry, steel structures of steel & iron companies, steel structures of Olympic game venues, wind power utilities and environment-protection industry.

R: How is the overseas business of CCS?
Mr. Li: We have established four overseas branches, including “CCS European Center”, “CCS American Center”, “CCS North/Northeast Asia Center” and “CCS Southeast Asia Center”. Our overseas business covers 25 countries and regions worldwide. Another overseas branch will be established in Brazil in July this year. At present, CCS has been authorized by 26 countries including Greece, Panama, Lybia and so on to survey their ships.
Although CCS is becoming more and more influential in the international shipping community, we should keep sober on the fact that CCS is still in the world’s third group in terms of tonnage and economic power. Lloyds Register, ABS and DNV are in the first group, NK in Japan, BV in France and GL in German are in the second group. Now we are making efforts to enter the second group.
I am confident that through our efforts in the implementation of the 11th and 12th “Five-Year Plans” and under the guide of the Central Committee and MOC, CCS will turn to be a world-class classification society enjoying good reputation both at home and abroad.

Some Information on Classification Societies
　　Classification societies can be traced back to 230 years ago in British. In the second half of the 18th century, there were several coffee houses near the Times River in London. Among these coffee houses, Edward Lloyd’s coffee house was most frequently visited. Merchants, marine underwriters, and others connected with shipping often gathered here. Most of ship and cargo insurance were handled here, so Edward’s coffee house became the ocean insurance center. Since technical levels of ships were required for ocean insurance, customers of that coffee house formed the Lloyd Register Society in 1760, with purpose to develop a system for inspection and classification of ships to be insured.
At that time, ship surveyors were mostly the retired captains or ship carpenters who could rapidly judge the quality of ships by their rich experience. They classified the technical conditions of the hull into A (excellent), E (good), I (middling), O (bad) or U (worst). They also classified ship equipment into G (good), M (middling), or B (bad). These classification symbols were gradually replaced by the current symbols as required.
As the classification profession evolved, the practice of assigning different classifications has been superseded. Today a ship either meets the relevant class society’s rules or it does not. As a consequence it is either in or out of class. A ship can be authorized to be in class by a classification society if it is in compliance with the required codes.
Following Lloyd Register Society, other countries also set up their own classification societies to develop their shipping industry and to gain more competitive edge. By now, there are nearly 50 classification societies worldwide.
　　In the early days of classification societies, the classification service for underwriters is not compulsory. Insurance companies may choose to entrust classification societies for ship classification or not. However, at present the classification service is not only for underwriters, but also has some politics colors. Government hope that the classification service can guarantee the quality and safety of vessels so that the international conventions signed by governments can be fulfilled 
　　Therefore, classification societies are endowed with more legitimate rights by governments. Each stage of shipbuilding, from design, construction, operation to maintenance, should be supervised by the classification society. Ships without survey and certification from classification societies cannot sail. In Recent years some international conventions regulate that ships must meet the classification codes, which make classification and inspection become statutory.