CSIS: Foreign Shipbuilding Orders Subsidize the PLA Navy's Fleet

In a new report released last week, the Washington-based non-profit Center for Strategic and International Studies (CSIS) highlighted the longstanding connection between commercial shipbuilding orders and the construction of China's blue-water navy. 

Most high end shipbuilders - like Chantiers de l'Atlantique, General Dynamics NASSCO, Fincantieri, DSME and Mitsubishi Heavy Industries - produce a mixture of warships and merchant vessels. All maritime nations value the dual-use nature of their shipbuilding industrial base, and many (including the United States) encourage commercial orders in order to preserve yard capacity for wartime needs. 

Chinese state shipbuilder CSSC is no exception to the rule. However, the scale of its efforts are unrivalled, particularly in its ability to attract foreign shipbuilding orders. 

CSSC is the world's biggest shipbuilder by tonnage and revenue, and it is a leading producer of the largest classes of boxships, bulkers and tankers. In recent years it has begun winning orders for more sophisticated vessels, including high-end LNG carriers and cruise ships. At the same time, and in the same yard locations, it uses its complex-shipbuilding acumen to construct the future of China's navy. CSSC is the sole builder of the PLA Navy's aircraft carriers, the leading producer of its amphibs, frigates and destroyers, and a major supplier of its submarines. 

In its report, CSIS singled out Taiwanese liner Evergreen Marine for its shipbuilding orders at CSSC. Taiwan is under constant pressure from China for "reunification" with the mainland, and Beijing has not ruled out the use of force to bring the island under its rule. Any invasion would involve an attack from the sea, using warships built at the same yards that contract with Evergreen. 

The think tank's data shows that Evergreen has ordered at least 44 ships from Chinese yards since 2018. At CSSC Jiangnan shipyard, satellite imagery obtained by CSIS showed three boxships wearing Evergreen's livery, all next door to the PLA Navy's Type 003 aircraft carrier. "It should raise more than a few eyebrows in Taipei that Taiwan’s premier shipping company is pouring money into the coffers of shipyards assembling warships for the Chinese navy," suggested CSIS.

In a statement sent to Reuters on Friday, Evergreen pushed back on the idea that its orders were in any way linked with CSSC's naval shipbuilding work. The firm noted that its orders were placed with CSSC's commercial shipbuilding department, not its naval department; however, all divisions of CSSC belong to the Chinese state.

“We believe the civil commercial ship building activities have nothing to do with national naval projects,” Evergreen Marine said in a statement.