China’s shipbuilding industry is experiencing a significant boom, securing major contracts worth billions while facing scrutiny from the United States over trade practices. With nearly 75% of global shipbuilding orders in 2024, China’s dominance raises concerns among international trade groups.
- China has captured approximately 75% of global shipbuilding orders in 2024.
- Major contracts include a $2.6 billion deal for LNG dual-fuel container ships.
- U.S. trade groups are calling for tariffs on Chinese-built vessels, citing unfair practices.
- China’s shipbuilding output has increased by over 18% in the first nine months of 2024.
China’s Dominance in Shipbuilding
Recent reports indicate that Chinese shipyards have received a staggering 87.11 million deadweight tons (dwt) in new orders, marking a 52% increase from 2023. This surge positions China as the leader in 14 out of 18 major shipbuilding categories, with the China State Shipbuilding Corporation (CSSC) at the forefront of this growth.
The CSSC recently secured a $2.6 billion order for large container ships, further solidifying its position in the global market. The vessels, designed for liquefied natural gas (LNG) dual-fuel propulsion, are expected to be delivered between 2028 and 2029. This contract is part of a broader trend where shipping companies are increasingly turning to Chinese shipyards for their new builds, particularly as they seek to comply with stricter environmental regulations.
U.S. Trade Concerns
The rapid expansion of China’s shipbuilding capabilities has not gone unnoticed in the United States. Trade groups, including unions representing steelworkers, have filed complaints against China, alleging unfair trade practices and state subsidies that distort competition. They are advocating for the U.S. government to impose tariffs on Chinese-built ships, which could significantly impact global shipping dynamics.
The proposed tariffs could charge up to $1.5 million for each Chinese-built vessel entering U.S. ports, a move that critics argue could disrupt global trade and increase shipping costs. The Canadian Marine Industries and Shipbuilding Association has echoed these concerns, calling for similar measures in Canada.
The Future of Shipbuilding
As demand for new ships continues to rise, driven by the need to replace aging vessels and meet environmental standards, China’s shipbuilding industry is poised for sustained growth. Analysts predict that the global shipbuilding market is entering a renaissance, with China likely to be the primary beneficiary.
In contrast, South Korea, traditionally a strong competitor in shipbuilding, is reportedly taking a more cautious approach, focusing on profitable orders rather than volume. This shift could further entrench China’s dominance in the sector.
China’s shipbuilding industry is not only expanding its capacity but also solidifying its grip on the global market amid rising demand and geopolitical tensions. As the U.S. contemplates tariffs and trade restrictions, the future of international shipping could be significantly reshaped, with China at the center of this evolving landscape.
Sources
- China Dominates Shipbuilding in 2024 Booking Three-Quarters of Orders, The Maritime Executive.
- China shipbuilders boost capacity, cementing grip on industry, Nikkei Asia.
- Chinese Shipbuilding Giant CSSC Secures USD2.6 Billion Order for Large Container Ships, Yicai Global.
- China’s dominance in global shipbuilding strengthens amid surging global demand, South China Morning Post.
- CMA CGM awards $2.6B contract for LNG dual-fuel boxships to Chinese shipyard, Offshore-Energy.biz.
