Reuters International

SHANGHAI (Reuters) - State-owned China COSCO Shipping Corp plans to launch cruise trips in the South China Sea next month, with the first route to travel from Sanya city in the country's southeast to the disputed Paracel Islands, state media reported on Tuesday.

The Paracels, known as the Xisha Islands in Chinese, are also claimed by Vietnam and Taiwan.

"It is practical to stimulate the local economy through development of tourism, logistics and infrastructure facilities," the China Daily newspaper quoted the company's chairman Xu Lirong as saying at a conference over the weekend.

In April, China's largest shipping company signed a contract with China National Travel Service Group Corp [SASACF.UL] and China Communications Construction Co Ltd to establish a cruise company to offer tourism services in the South China Sea.

In a statement sent to Reuters, China COSCO Shipping said developing tourism services in the South China Sea was part of China's "One Belt, One Road" strategy and the responsibility of its state enterprises.

China claims 90 percent of the potentially energy-rich South China Sea. Brunei, Malaysia, the Philippines, Vietnam and Taiwan lay claim to parts of the sea, through which passes about $5 trillion of trade a year.

A growing number of skirmishes have taken place amid rising regional tensions over China's assertiveness in the South China Sea, the latest last week when an Indonesian naval vessel fired on a Chinese fishing boat near the Natuna Islands.

The inaugural COSCO route to the Xisha Islands will be followed by the development of other routes in the South China Sea and Taiwan Straits, with a gradual expansion to international routes, in a bid to build China's first national cruise brand, the company said.

Countries competing to cement their rival claims have encouraged a growing civilian presence on disputed islands in the South China Sea. The first cruises from China to the Paracel islands were launched by Hainan Strait Shipping Co in 2013.

Beijing has said it wants to build Maldives-style resorts around the South China Sea.

(Reporting by Brenda Goh; Editing by Michael Perry)

reuters_tickers

 Reuters International