China COSCO (Ocean Shipping Group Co) Holdings Company, the country's top shipping conglomerate, on Friday reported a loss of 271 billion yuan ($432 million) for the first half of 2011, registering a massive decline of 176.8 percent year-on-year.

The deficit was mainly a result of the lackluster global economy, with demand in developed economies remaining flat while emerging markets are busy combating inflation, said Wei Jiafu, the company's chairman.

However, China's role in promoting global economic recovery with its ongoing processes of urbanization and industrialization is likely to lift the shipping industry in the long term, he said.

"We hope to see the market warm up as the world economy bounces back" in the second half of the year, Wei added.

The shipping industry, which acts as a barometer of world economic activity, has been affected by the fragile economic recovery.

The dismal market, plagued by the rising price of oil, overcapacity and fierce competition, has further strained the company's operations, said Zhang Liang, executive director.

During the first half, revenue from COSCO's container business declined 5 percent year-on-year.

The company's dry-bulk shipping business was most seriously affected by industry overcapacity, resulting in difficulties in raising charges. Revenue from the bulk shipping business fell 27 percent to 12.2 billion yuan during the period from a year earlier, according to the company.