Fishing fleet tax strategy for China's ocean.

Sustainable Seas: Can Taxing Fishing Fleets Save China's Inshore Fisheries?

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Samir D’Costa in Climate & Environment December 2025 • 4 min read.

"Explore how innovative tax policies could revolutionize fishing capacity and revitalize marine ecosystems in China, balancing economic needs with environmental stewardship."


For decades, marine fisheries worldwide have grappled with the pressing issue of overcapacity. In China, this challenge is particularly acute in its inshore waters, where a surge in fishing activity since the 1990s has led to significant ecological and economic consequences. Overfishing depletes fish stocks, damages marine habitats, and threatens the livelihoods of countless fishing communities.

Traditional management approaches have often fallen short of effectively curbing fishing capacity. Recognizing the urgent need for innovative solutions, researchers and policymakers are increasingly exploring economic tools, such as taxation, to incentivize sustainable fishing practices. The central idea is simple: by making excessive fishing more costly, it becomes less attractive, thereby reducing pressure on marine resources.

This article delves into a pioneering study that investigates the potential of implementing a tax system on Chinese inshore fishing fleets. By examining the interplay between fishing capacity, economic output, and tax policies, the study offers valuable insights into how China can steer its fishing industry towards a more sustainable path. We'll explore the methodologies used, the challenges identified, and the potential benefits of adopting a well-designed tax strategy for marine resource management.

Measuring the Unseen: How Fishing Capacity is Quantified

Fishing fleet tax strategy for China's ocean.

Before designing effective tax policies, it’s essential to accurately measure the fishing capacity of Chinese inshore fleets. This involves assessing the potential output of the fleets, considering factors such as the number of vessels, their tonnage, engine power, and the size of the workforce. Traditional methods often fall short in capturing the multifaceted nature of fishing capacity.

A study highlighted in the research employs a Data Envelopment Analysis (DEA) method to evaluate the fishing capacity and capacity utilization of Chinese coastal provinces over a 13-year period. The DEA method offers a comprehensive approach by converting various inputs into a single measure, providing a clear picture of the potential output. This allows for a more accurate assessment of overcapacity and its impact on marine resources.

  • Data Collection: Gathered data from 1993-2005 on 11 coastal provinces/cities in China.
  • Input Factors: Considered vessels, gross tonnage, total power, and labor force.
  • Output Index: Referred to inshore catch as the output.
  • DEA Application: Used Coelli T.J.'s DEAP Version 2.1 to compute capacity output.
Quantifying fishing capacity through DEA provides a solid foundation for understanding the scale of the problem and designing targeted interventions. With this approach, policymakers can identify the most critical areas for intervention and tailor tax policies to effectively address overcapacity and promote sustainability.

A Call to Action: Tax Policies for a Sustainable Future

In conclusion, the implementation of strategic tax policies represents a promising avenue for controlling fishing capacity and promoting the sustainability of China's inshore fisheries. The study underscores the importance of setting appropriate tax rates to ensure the effectiveness of such policies. By carefully considering the economic and ecological implications, China can pave the way for a healthier marine environment and a more prosperous fishing industry.

About this Article -

This article was crafted using a human-AI hybrid and collaborative approach. AI assisted our team with initial drafting, research insights, identifying key questions, and image generation. Our human editors guided topic selection, defined the angle, structured the content, ensured factual accuracy and relevance, refined the tone, and conducted thorough editing to deliver helpful, high-quality information.See our About page for more information.

This article is based on research published under:

DOI-LINK: https://doi.org/10.48550/arXiv.2408.05653,

Title: Measuring And Controlling Fishing Capacity For Chinese Inshore Fleets

Subject: econ.gn q-fin.ec

Authors: Yi Zheng

Published: 10-08-2024

Everything You Need To Know

1

What is the primary challenge facing China's inshore fisheries, and what impact does it have?

The main challenge is overcapacity, stemming from a surge in fishing activity since the 1990s. This overcapacity leads to overfishing, which depletes fish stocks, damages marine habitats, and threatens the livelihoods of fishing communities. The ecological and economic consequences are significant, highlighting the urgent need for sustainable management strategies to address the issue.

2

How does taxation help in managing fishing capacity, and why is this approach being considered in China?

Taxation is an economic tool designed to make excessive fishing more expensive. By increasing the cost of fishing, it discourages overfishing, thereby reducing pressure on marine resources. In China, this approach is being considered because traditional methods have been ineffective in curbing fishing capacity. Taxation provides an innovative solution to incentivize sustainable fishing practices and promote a healthier marine environment.

3

What is the Data Envelopment Analysis (DEA) method, and how is it used to assess fishing capacity in the context of this research?

The DEA method is a comprehensive approach used to quantify fishing capacity. It converts various inputs, such as the number of vessels, gross tonnage, engine power, and the labor force, into a single measure of potential output. In this research, the DEA method was applied to data from 11 coastal provinces/cities in China over a 13-year period (1993-2005) to assess their fishing capacity and capacity utilization. This allows for a more accurate assessment of overcapacity and its impact on marine resources by considering the interplay of various factors.

4

What are the key input factors and output index used in the DEA application for evaluating fishing capacity?

The DEA application considered several input factors: vessels, gross tonnage, total power, and the labor force. The output index used was the inshore catch. By analyzing these factors, researchers could determine the potential output of the fishing fleets and assess the extent of overcapacity within China's inshore waters. This assessment is crucial for designing effective tax policies.

5

What are the potential benefits of implementing tax policies on Chinese inshore fishing fleets, and what is the call to action?

Implementing tax policies on Chinese inshore fishing fleets offers several potential benefits. Primarily, it can help control fishing capacity, which in turn promotes the sustainability of marine resources. A well-designed tax strategy can lead to a healthier marine environment and a more prosperous fishing industry. The call to action is for policymakers to carefully consider the economic and ecological implications and set appropriate tax rates to ensure the effectiveness of such policies, paving the way for a sustainable future for China's fisheries.

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