Bermuda’s shipping register is set to get a boost after China agreed to give island-flagged ships “most favoured” status.

Captain Pat Nawaratne, head of the Bermuda Shipping and Maritime Authority, set up last year, said the move would give the island a competitive edge in the registry business.

He explained: “This will benefit us, especially when Bermuda-registered ships arrive in Chinese ports. “Ports charge for visits — port dues based on tonnage of the vessel and trade of the vessel.

“If we are in the most favoured category these can be substantially reduced and all the dues that go along with trade.”

Captain Nawaratne said that three cruise ships formerly registered in Bermuda had moved registry to the UK, which has most favoured status with China, to take advantage of the cut rates in port dues and other areas like customs duty. And he added that — in addition to a bid to have the three return to a Bermuda registration — it was hoped to attract even more ships to fly the island’s version of the UK Merchant Navy flag.

Captain Nawaratne said: “We hope to get these ships back into Bermuda that went away to the UK.”

He added: “It will be across the board — everybody will benefit from it as it extends to cargo ships as well.”

The news was confirmed by Liu Xiaoming, the Chinese ambassador to the UK, who is visiting Bermuda this week.

Government House worked with the UK and China over several months to achieve the new status for Bermuda ships flying the Red Ensign.

Michael Fahy, the transport minister, said: “This is of tremendous benefit.

“The advantages include reduced port dues paid by Bermuda-flagged ships visiting Chinese ports, which will give these ships a competitive edge.

“This will help us retain business which may otherwise have moved elsewhere and help us attract new business.

“We are grateful for confirmation that Bermuda can benefit from this agreement under the UK umbrella.”

The UK/China deal also extends to five other Overseas Territories whose ships also sail under the Red Ensign.

Bermuda’s ship registry is a Category 1 member of the British Red Ensign Group, a worldwide fleet of vessels, including large cruise ships, oil, gas and chemical tankers, container ships, bulk carriers, offshore vessels and megayachts.