Illustration: Xia Qing/GT

In the face of intensifying competition and mounting pressure from the US, the Chinese shipbuilding industry, despite its substantial order backlog, has an urgent need for technological upgrades and a proactive exploration of new markets to bolster its competitiveness and adapt to the evolving demands of the global landscape.

According to London-based Clarkson Research Services, South Korean shipyards clinched orders totaling 820,000 compensated gross tons (CGTs) for 17 ships in March, accounting for 55 percent of the global total and overtaking China's lead, the Yonhap News Agency reported on Friday. China followed with 520,000 CGTs for 31 vessels, taking up 35 percent of the global total.

It is normal to see temporary shifts in global shipbuilding orders, which vary each month with market fluctuations. In February, China secured 2.63 million CGTs of orders, with South Korea obtaining 340,000 CGTs. But still, the March figures vividly illustrate the intense competition faced by Chinese shipyards.

While Chinese shipyards maintained an edge in terms of ship orders in March, their South Korean counterparts have the upper hand in terms of gross tonnage thanks to their focus on high-value, large ships. This development not only provides a snapshot of the global shipbuilding race but also emphasizes that the future of the Chinese shipbuilding industry lies not only in expanding production capacity but, more importantly, in elevating the added value of its products.

China's shipbuilding industry has indeed achieved remarkable progress, leading the world in terms of major shipbuilding indicators for several consecutive years. In 2024, China's shipbuilding completion volume accounted for 55.7 percent of the global total. New orders for China's shipbuilding industry accounted for 74.1 percent of global volume and orders on hand accounted for 63.1 percent.

Nevertheless, beneath this success lie multiple challenges. Domestically, despite being an essential part of the global shipping ecosystem, the Chinese shipbuilding industry faces challenges due to a high degree of dependence on external suppliers for core equipment and technical bottlenecks in developing high-value ships.

Against this backdrop, to maintain high-quality development, the Chinese shipbuilding industry needs dual breakthroughs. While enhancing technical prowess in high-margin niches like green and smart vessels, the industry needs to explore new customers and demands. This necessitates in-depth research into the diverse demands of different countries and regions.

This is because ship requirements in various regions may vary significantly. Regions such as Asia, Africa and Latin America have unique demands regarding vessel performance, price sensitivity and operating environments. For example, some inland waterways necessitate shallow-draft, highly maneuverable vessels, while certain coastal areas require ships equipped with advanced berthing and loading-unloading capabilities. 

In 2023, Chinese shipbuilding products were exported to 191 countries and regions, with export values of $17.73 billion to Asia, $2.9 billion to Europe, and $2.84 billion to Latin America, according to data from the China Association of the National Shipbuilding Industry.

Moreover, the improvement of port infrastructure in developing countries opens up opportunities for the operation of larger-tonnage vessels. 

Thus, Chinese shipyards need to conduct thorough research to deliver tailored solutions and continuously improve their competitiveness in emerging markets.

In the meantime, the Chinese shipbuilding industry needs to aim to lead market development by establishing a more open innovation system and translating global customer requirements into drivers for product upgrades. 

In traditional strongholds like bulk carriers and oil tankers, efforts should be focused on improving energy efficiency. In high-value-added segments such as liquefied natural gas carriers and ultra-large container ships, China needs to adapt to emerging market demands and optimize supply, according to an article from People's Daily in October.

By discerning emerging market trends and consistently delivering high-quality vessels that cater to diverse international demands, China will not only solidify its position but also uphold a resilient development trajectory, which will not be hindered by external headwinds.