Shipbuilding Industry Set to Improve

World supremacy in the shipbuilding industry is an Asian affair. Ten years after South Korea took over Japan, 2009 witnessed China to overcame South Korea. After the spectacular success of Seoul’s effort to build up a strategic sector, the international crisis caused a new dominance.
China is now the biggest shipbuilder by the volume of deadweight tonnage. The country, manufacturer of mainly small-medium vessels, was almost untouched by the reduction of orders which on the contrary affected gigantic ships by South Korea. In the first half of the year, China received 46% of the total orders and accounted for 46% of the deliveries to the world market. These results come from different components; all sector contributed to the achievement: huge cargoes or passenger ships, yachts, military vessels, cruise liners, boats. The industry’s fabric is still very fragmented with 1.500 manufacturers (vs 30 in South Korea).
China’s top position was reached before than expected, with regard to the China State Shipbuilding Corporation (CSSC)’ s forecast. CSSC is an Hong Kong-listed conglomerate, one of the dominant figures of the sector with China Shipbuilding Industry Corporation (CSIC), both SOEs’. At the beginning of our millennium CSSC put forward a strategic objective, named “5-3-1 goal”. The company aimed to be among the top 5 shipbuilders in 2005, and to progressively increase its position, to became n.1 in the world, so trailing China to be the biggest shipbuilder in 2015.
China moved even faster. The success was due to many factors. Firstly Japan and South Korea transferred technology and moved facilities in China, attracted by low labour costs. It has been a massive transfer of resources and capitals. Thus, export from China is not entirely and originally Chinese. In addition, the country cannot rely on relatively cheap vessels to consistently perform in the international markets.
Like in many others sectors, shipbuilding industry needs to concentrate on few powerful players. Innovation, investments, rationalization mark the path to modernity. Compliance to pollution reduction requirements, design the latest ship trends, provide larger capacity of transportation are the main tasks China has to face. They also will help China’s recovery. Export is again on the rise; and it needs ships and ports even on a larger scale. Shanghai will set the standard. The city, which saw the first shipyard of country in 1865, has now reached a new height. In the period Jan-Aug 2010, the Port of Shanghai’s container output stood at more than 19 million standard container. Singapore’s previous record was eclipsed and Shanghai became, for the first time in history, the largest container port in the world.

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