Courtesy of Hudong-Zhonghua Shipbuilding
Japan and South Korea would struggle to quickly ramp up shipbuilding to meet US demand for alternatives under the US government's plan to impose port fees on China-linked ships, a top Japanese shipping executive was quoted by Reuters as saying on Monday.
Japanese shipbuilding is running near full capacity, with little scope for expansion until 2028, while shipbuilders in South Korea, as well as in the US, face financial challenges, Takaya Soga, CEO of Nippon Yusen, Japan's largest shipping line, told Reuters.
The remarks came as the US administration has proposed to impose hefty fees on China-linked ship visits to American ports. Such remarks, especially from a potential competitor, also underscored the fact that the leading position of China's shipbuilding sector in the global market and its resilient development trend cannot be easily derailed by external headwinds.
If anything, the lack of sufficient alternative capacity to replace China's substantial output highlights the irreplaceable and pivotal role that China's shipbuilding industry plays in the global supply chain.
Chinese shipbuilders secured orders for 46.45 million compensated gross tons in 2024, accounting for 71 percent of global orders, with seven of the top 10 shipbuilders by order volume coming from China, according to data from Clarksons Research, a UK shipping research firm.
The figures directly demonstrate the strength of China's shipbuilding industry and also offer a powerful testament to the strong demand for Chinese ships in the global market. Behind this dominance lies decades of investment by China's shipbuilding industry in technological innovation, production capacity and supply chain integration.
Given its considerable strengths, the Chinese shipbuilding industry will unlikely be substantially affected by the US' proposed fees in the foreseeable future. Quite the contrary, such containment strategies will only force Chinese shipbuilders to further improve their innovation capabilities and pursue diversified development strategies that will make them even stronger.
First, technological upgrading is undoubtedly the core point for China's shipbuilding industry to respond to external challenges. Amid growing competition, technological innovation has become the key to enhancing industry competitiveness. Innovation has long been a top priority for Chinese shipbuilders, which has yielded remarkable results, especially in terms of high-end vessel construction such as liquefied natural gas carriers and ultra-large containerships. Any attempt by the US to contain Chinese shipbuilders will only further force them to double down on research and development.
Second, optimizing the industrial chain is an important aspect of the development of China's shipbuilding industry. The shipbuilding industry involves complex components and a lengthy supply chain, spanning over 50 industries. China's shipbuilding industry will further strengthen collaborative cooperation with upstream and downstream industries such as steel, machinery and electronics, enhancing the overall competitiveness. From raw material supply and component manufacturing to ship assembly and after-sales service, China will improve the operational efficiency of the entire industrial process and enhance the brand influence of Chinese shipyards.
Third, market diversification is an effective way for China's shipbuilding industry to resist external risks. On the basis of consolidating traditional market shares, China's shipbuilding industry may also explore new regional markets, such as Southeast Asia, South America and Africa. These regions are in a stage of rapid development and have a strong demand for various types of cargo ships. By cooperating with local companies, China's shipbuilding industry can not only meet local market demand but also further expand its global market share and enhance its resilience.
History has shown that external pressure and protectionism will not stop China's industrial development. Just as US suppression has spurred China's self-reliance in various sci-tech fields, the pressure faced by the shipbuilding industry will only fuel its determination to achieve technological breakthroughs and expand its market reach.
