China's Shipbuilding Industry: Tough at the Top

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The shipbuilding industry has been the scene for a major uptick in Chinese export market share in the period 2007-10. 

Ship Exports.png
The OECD countries that China captured market share from were in this case Japan and South Korea. These two, in their turn, were responsible for capturing the market from Europe as early as the 1970s, but it was only in 2010 that South Korea was surpassed by China as the world's leading shipbuilder. The chart above illustrates how rapidly this occurred in the period 2007-10. 

According to the global shipping services provider Clarksons, in 2011 China accounted for around 41% of the global shipbuilding share in dead weight tonnes, while South Korea had 33%, Japan 20%, and Europe only 2%. China's ascent in the industry was complicated, however, by the global financial crisis. With sluggish demand for new ships and rising costs for labour and steel, the volume of new orders in 2011 fell 52%, according to the China Association of the National Shipbuilding Industry (CANSI). 

China's smaller shipyards are bearing the brunt of the downturn, and more than 30% of them could go bankrupt this year, according to some observers. The current dearth of orders is not a new phenomenon, moreover, as Clarksons have pointed out that the numbers of orders for local Chinese yards have been declining all the way since 2007.     

Early in 2012, the dire situation facing China's smaller shipyards seems to have contributed to China's Transport Ministry banning from its ports any ships larger than 300,000 dead weight tons. For more on this somewhat controversial issue, see this Reuters report.   

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1 Comments

It was very interesting
I am Fatemeh Ghanbari
Attorney and university professor
Of Iran

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