China Dominates Shipbuilding in 2024 Booking Three-Quarters of Orders

 

Chinese officials released figures for the shipbuilding industry in the first nine months of 2024 reporting that its yards have dominated new orders and expanded their global leadership. The numbers will undoubtedly further fuel the growing global sentiment against China’s shipbuilding dominance and the specific protests by trade groups in the United States and Canada.

China’s Association of the National Shipbuilding Industry (CANSI) reported that its yards had received nearly 75 percent of the overall orders placed in 2024 or a total of 87.11 million dwt. The report said the volume is up nearly 52 percent over 2023 as China continues to grow its shipbuilding output. They calculated the Chinese enterprise now accounts for 61.4 percent of the global newbuilding orders or a total of 193.3 million dwt.

The report highlights that China is now leading the orders for 14 out of the 18 major types of shipbuilding projects and that many of its yards are exceeding their annual targets. Major companies are adding additional capacity which helped China to grow its shipbuilding output by over 18 percent in the first nine months of 2024. Chinese shipbuilders completed 36.34 million dwt so far in 2024.

Chinese media reports cite the country’s well-established supply chain, ability to deliver vessels on time, and cost-reduction efforts. However, critics point to a heavily subsidized state-controlled industry while they contend that commercial shipbuilding is being used to support the rapid growth of the Chinese navy. Most of the shipbuilding is carried out by the multiple companies controlled by China State Shipbuilding Company (CSSC), a state-controlled enterprise that is further moving to consolidate its dominance. It recently announced a reorganization to further absorb its subsidiary China Shipbuilding Industry Corporation.

South Korea has long been the only significant rival to China, but recent data shows it is slipping. Just released September numbers from Clarkson Research said that the South Korean yards accounted for only 12 percent of the orders placed in the month. Order volume was down overall by 25 percent year-over-year, but 90 ships were contracted with 65 going to China and just 14 to South Korea. China won orders for 2.48 million CGT versus just 340,000 for the Korean yards.

Clarkson calculates that China has 55 percent of the global shipbuilding backlog while Korea has 26 percent of the orders. Japan is a distant third.

The U.S. Trade Office is reviewing a complaint filed by a collation of unions including steelworkers that cites China for unfair trade practices and state subsidies for the industry. They are calling for the U.S. to impose a tariff on Chinese-built ships, which was also picked up by trade groups in Canada. The Canadian Marine Industries and Shipbuilding Association (CMISA) at the end of August issued a call for the Canadian government to impose a 100 percent tariff on Chinese-built ships.

Chinese officials have called the U.S. complaint protectionism. They said that the problems in the U.S. shipbuilding industry are long-term, endemic problems, going far beyond competition from China.