Abstract
China’s shipbuilding industry currently commands over half of the global market, driven by strategic government policies, sizable infrastructure investments, and competitive pricing. Its state-owned enterprises benefit from policy initiatives such as “Made in China 2025,” the Belt and Road Initiative, and the combining of military and civilian economic infrastructure and technology development goals that have enabled production of advanced ships such as LNG carriers, cruise liners, and naval vessels. The article examines the state of Chinese shipbuilding and notes that Chinese state support plays a pivotal role in bolstering the domestic shipbuilding sector. Among other things, state subsidies and preferential tax policies have reduced operating costs and encouraged continuous expansion allowing Chinese firms a financial advantage over competing shipbuilding nations like South Korea and Japan. While several headwinds exist, including overcapacity, dependence on foreign technology, and rising competition from South Korea, Japan, and emerging markets, this article argues that the Chinese shipbuilding sector is capable of meeting these and other potential challenges owing to strong state support in the form of subsidies for expansion and technological change.
Keywords
China, Shipbuilding, Industrial policy, State-Owned Enterprises, Belt and Road Initiative (BRI), Subsidies
Introduction
The global shipbuilding industry has shifted its focus toward low-cost manufacturing bases over the past century, driven by competitive labour and production expenses. Emerging nations have benefited from this shift, especially during periods of high demand. The distribution of shipbuilding orders has shown distinct trends across different regions. While South Korea and European countries have seen their order-books dominated by high-value, technologically-advanced vessels, such as container ships and luxury cruise liners, reflecting their expertise in complex shipbuilding, China has focused more heavily on producing bulk carriers, which cater to the demand for cost-effective cargo transportation and align with its mass-production capabilities. These distinctions highlight the strategic specialisations that countries have developed to maintain competitive advantages within the global maritime sector. The global shipbuilding industry has undergone a dramatic shift in the past decade, with China emerging as the undisputed leader in market share, surpassing traditional powerhouses such as South Korea and Japan. While existing scholarship attributes China’s dominance to state-backed financial subsidies, strategic industrial policies, and economies of scale fewer studies critically examine the sustainability of this growth amid evolving geopolitical and technological challenges. Recent analyses have focused on China’s subsidy-driven pricing advantages or its capacity to undercut competitors through cost efficiency. However, these studies overlook two critical gaps: (1) the interplay between geopolitical risks and China’s shipbuilding resilience, and (2) the industry’s preparedness to meet decarbonisation demands and advanced technological standards. Geopolitical tensions, particularly U.S.-China strategic competition, have intensified scrutiny of China’s maritime ambitions, with nations like Japan and South Korea framing Chinese dominance as a security threat. Concurrently, the International Maritime Organization’s (IMO) 2030 emissions targets have accelerated demand for green vessels, such as LNG-powered and ammonia-fuelled ships, areas where Chinese firms lag behind South Korean and European innovators. While prior research acknowledges these challenges, it does not systematically evaluate how China’s state-capitalist model—combining subsidies, R&D investments, and policy flexibility—could mitigate these risks. This article addresses these gaps by interrogating the adaptive capacity of China’s shipbuilding industry. It argues that despite mounting geopolitical headwinds and technological deficits, China’s centralised governance structure enables rapid reallocation of resources to sustain dominance. For instance, recent state directives prioritise dual-use technologies (e.g., autonomous vessels) and green shipping subsidies, suggesting a strategic pivot overlooked in current literature. By synthesising policy analysis, trade data, and case studies, this study contributes a nuanced framework for understanding how state support shapes industrial resilience in an era of multipolar competition and climate-driven disruption.
China’s Shipbuilding Industry
China’s shipbuilding industry has witnessed remarkable growth since the early 2000s, culminating in its emergence as the world’s largest shipbuilding nation by 2010. In 2023, China accounted for 46% of the world’s completed tonnage and 63.5% of new orders. The year 2024 saw a 52% increase in the output to 87.11 million DWT according to statistics from the China Association of the National Shipbuilding Industry (CANSI). As of 2025, global shipbuilding orders are concentrated in China, the Republic of Korea and Japan. These three economies accounted for 96% of shipbuilding in terms of gross tonnage with China alone responsible for 53%. China has been a big driver of seaborne activity in the last 20 years and is already the third-largest merchant fleet in the world.
Reference
- Funaiole, M. P., Hart, B., & Bermudez, J. S. Jr. (2023). In the shadow of warships: How foreign companies help modernize China’s navy. Centre for Strategic and International Studies. https://features.csis.org/china-shadow-warships/
- Myrto Kalouptsidi, Detection and Impact of Industrial Subsidies: The Case of World Shipbuilding, NBER Working Paper No. 20119 (Cambridge, MA: National Bureau of Economic Research, 2016), https://doi.org/10.3386/w20119; U.S.-China Economic and Security Review Commission. (2023). Annual report to Congress. U.S. Government Publishing Office. https://www.uscc.gov/annual-report/2023-annual-report-congress
- Xavier, C., & Jacob, J. T. (2023). ‘Introduction: Studying China’s Themes, Partners and Tools in South Asia’, in C. Xavier, & J. T. Jacob (eds.) How China engages South Asia: Themes, Partners, and Tools. New Delhi, India: Centre for Social and Economic Progress. 1-12. https://csep.org/reports/introduction-studying-chinas-themes-partners-and-tools-in-south-asia/
- Funaiole, M. P., Hart, B., & Bermudez, J. S. Jr. (2023). In the shadow of warships: How foreign companies help modernize China’s navy. Centre for Strategic and International Studies. https://features.csis.org/china-shadow-warships/
- Chawla, A. K., & Jacob, J. T. (2025). ‘Gwadar Seaport, Pakistan’, in Jean-Marc F. Blanchard (ed.) Chinese Overseas Ports in Southeast and South Asia Cutting Through the Froth. London and New York: Routledge, 112–133.
- State Council Information Office of the People’s Republic of China (SCIO). (2024, October 11). China gets most orders for green ships. https://english.www.gov.cn/news/202410/11/content_WS670897a3c6d0868f4e8ebb19.html
- Maritime Executive. (2024). China dominates shipbuilding in 2024: Booking three-quarters of orders. https://maritime-executive.com/article/china-dominates-shipbuilding-in-2024-booking-three-quarters-of-orders
- United Nations Conference on Trade and Development (UNCTAD). (2024). Review of Maritime Transport 2024. https://unctad.org/system/files/official-document/rmt2024_en.pdf
- Hong, P. C., Park, Y. S., Hwang, D. W., & Sepehr, M. J. (2024). A growth theory perspective on the competitive landscape of shipbuilding: a comparative study of Japan, Korea, and China. Maritime Economics & Logistics, 26(3), 462-489.
- Robertson, P. E. (2024). The Military Rise of China: The Real Defence Budget Over Two Decades. Defence and Peace Economics, 35(7), 809-825.
- Sun, M., Tong, T., Jiang, M., & Zhu, J. X. (2024). Innovation trends and evolutionary paths of green fuel technologies in maritime field: A global patent review. International Journal of Hydrogen Energy, 71, 528–540. https://doi.org/10.1016/j.ijhydene.2024.05.260
- Organisation for Economic Co-operation and Development (OECD). (2021). Report on China’s shipbuilding industry and policies affecting it. OECD Science, Technology and Industry Policy Papers, No. 105. OECD Publishing, Paris. https://www.oecd.org/content/dam/oecd/en/publications/reports/2021/04/report-on-china-s-shipbuilding-industry-and-policies-affecting-it_f15b480d/bb222c73-en.pdf.
- United Nations Conference on Trade and Development (UNCTAD). (2022). Review of Maritime Transport 2022. https://unctad.org/system/files/official-document/rmt2022_en.pdf
- SEA Europe, Shipbuilding Market Analysis, April 2024 (Brussels: SEA Europe, 2024), https://www.seaeurope.eu/images/2023_Shipbuilding_Market_Analysis_April_2024.pdf
- ING, “Asia’s Shipbuilding Renaissance,” ING Think, December 16, 2024, https://think.ing.com/articles/asia-shipbuilding-renaissance/#:~:text=In%20the%20case%20of%20Vietnam,6%25%20from%202023%20to%202032
- Maritime Industry Authority, Maritime Industry Development Plan 2028 (MIDP 2028) (Manila: Maritime Industry Authority, 2024), accessed September 5, 2025, https://marina.gov.ph/wp-content/uploads/2024/04/MIDP-2028-as-of-29-April-2024.pdf
- United Nations Conference on Trade and Development (UNCTAD). (2024). Review of Maritime Transport 2024. https://unctad.org/system/files/official-document/rmt2024_en.pdf
- Organisation for Economic Co-operation and Development (OECD), Report on China’s Shipbuilding Industry and Policies Affecting It, OECD Science, Technology and Industry Policy Papers, no. 105 (Paris: OECD Publishing, 2021), https://doi.org/10.1787/bb222c73-en
- OECD (2011), OECD Journal: General Papers, Volume 2010 Issue 3, OECD Publishing, Paris, https://doi.org/10.1787/gen_papers-v2010-3-en.
- Center for Security and Emerging Technology (CSET). (2021, 12 May). Outline of the People’s Republic of China 14th Five-Year Plan for National Economic and Social Development and Long-Range Objectives for 2035 (translation). https://cset.georgetown.edu/publication/china-14th-five-year-plan/
- Hima Bindu Gokireddy and Amrita Jash, “China’s Shift from CMI to MCF: Military Modernization and the Defense Industry at the Core,” Issues & Studies 60 (September 30, 2024). https://doi.org/10.1142/S1013251124500127
- Dupont-Sinhsattanak, Alexandre. 2025. “Modernizing a Giant: Assessing the Impact of Military-Civil Fusion on Innovation in China’s Defence-Technological Industry.” Defence and Peace Economics, February, 1–27. doi:10.1080/10242694.2025.2460458.
- Panle Jia Barwick, Myrto Kalouptsidi, and Nahim Bin Zahur, Industrial Policy Implementation: Empirical Evidence from China’s Shipbuilding Industry, working paper, December 2023, accessed September 5, 2025, https://panlebarwick.github.io/papers/Yr23_ChinaShipyard.pdf
- Ibid.
- Lorenzo Rotunno and Michele Ruta, Trade Implications of China’s Subsidies, IMF Working Paper No. 2024/180 (Washington, DC: International Monetary Fund, 2024), https://doi.org/10.5089/9798400282478.001
- Guang Li and Lee G. Branstetter, “Does ‘Made in China 2025’ Work for China? Evidence from Chinese Listed Firms,” Research Policy 53, no. 6 (2024): 105009. https://doi.org/10.1016/j.respol.2024.105009
- Ibid.
- Paul C. Hong & Young Soo Park & David W. Hwang & Mehrdad Jalali Sepehr, 2024. "A growth theory perspective on the competitive landscape of shipbuilding: a comparative study of Japan, Korea, and China," Maritime Economics & Logistics, Palgrave Macmillan; International Association of Maritime Economists (IAME), vol. 26(3), pages 462-489, September. https://doi.org/10.1057/s41278-023-00279-5
- United Nations Conference on Trade and Development (UNCTAD). (2022). Review of Maritime Transport 2022. https://unctad.org/system/files/official-document/rmt2022_en.pdf
- OECD, 2024.
- Ibid.
- Ibid.
- Kalouptsidi, M. (2018). Detection and Impact of Industrial Subsidies: The Case of Chinese Shipbuilding. The Review of Economic Studies, 85(2 (303)), 1111–1158. https://www.jstor.org/stable/26543912
- Ministry of Industry and Information Technology of the People’s Republic of China (MIIT), Guidelines for Promoting High-Quality Development of the Shipbuilding Industry (2020).
- Export-Import Bank of China. (2023). Annual Report 2023. http://english.eximbank.gov.cn
- Ministry of Transport of the People’s Republic of China & National Development and Reform Commission. (2024, August 2). Notice of the Ministry of Transport and the National Development and Reform Commission on “Issuing the Implementation Rules for Subsidies for the Scrapping and Renewal of Old and Used Transport Vessels” (translation). https://xxgk.mot.gov.cn/2020/jigou/zhghs/202408/t20240802_4145816.html
- Maritime Executive, 2024.
- Ministry of Industry and Information Technology (MIIT). Action plan for green development in the shipbuilding industry (2024-2030) (translation). (2023). https://www.gov.cn/zhengce/zhengceku/202312/content_6923175.htm
- Cho, Hae Jeong, Serkan Ünalan, and Zhihang Meng. 2024. Economic Benefits of Building Zero-Emission Capable Vessels in East Asia. Working Paper, International Council on Clean Transportation, September 26, 2024. https://theicct.org/publication/economic-benefits-of-building-zero-emission-capable-vessels-in-east-asia-sept24/
- Hiver Lab. "Japan Digital Twin Shipbuilders Net-Zero Future." 2024. https://hiverlab.com/japan-digital-twin-shipbuilders-net-zero-future/; U.S. International Trade Administration. "Japan’s Next Generation Marine Technology." 2024. https://www.trade.gov/market-intelligence/japans-next-generation-marine-technology?
- Chen, Yanhui, Ma Ming, and Mi Jiajun. "The Impact of R&D Investment on the New Orders Received by Shipbuilding Enterprises under the Background of Innovation-Driven Development." Journal of Marine Engineering & Technology 23, no. 4 (2024): 247–258. https://doi.org/10.1080/20464177.2023.2266885.
- Zhang, Xin. "Chinese Shipbuilding amid Historical Changes: An Overview." Asian Review of World Histories 11, no. 1 (2023): 130–152. https://doi.org/10.1163/22879811-bja10008
- American Enterprise Institute. China Global Investment Tracker. 2023. https://www.aei.org/china-global-investment-tracker
- Center for Strategic and International Studies. "Responding to China's Growing Influence in Ports of the Global South." Last modified October 30, 2024. https://www.csis.org/analysis/responding-chinas-growing-influence-ports-global-south
- Hyundai Heavy Industries. "Retrofitting Ships: A Smarter Path to a Greener Future." February 10, 2025. https://www.hd.com/en/newsroom/media-hub/press/view?detailsKey=3431
- Smith, Yves. "Industrial Policy: Lessons from China’s Shipbuilding." Naked Capitalism, November 5, 2024. https://www.nakedcapitalism.com/2024/11/industrial-policy-lessons-from-chinas-shipbuilding.html
- . Mitsubishi Heavy Industries. "MHI Joins Maersk Mc-Kinney Møller Center for Zero Carbon Shipping." Mitsubishi Heavy Industries News, June 25, 2020. https://www.mhi.com/news/200625.html
- Smith, Yves. "Industrial Policy: Lessons from China’s Shipbuilding." Naked Capitalism, November 5, 2024. https://www.nakedcapitalism.com/2024/11/industrial-policy-lessons-from-chinas-shipbuilding.html
- U.S. Department of Transportation. "ICYMI: Secretary Duffy Op-Ed: A Golden Age of Transportation Will Make Shipbuilding Great." U.S. Department of Transportation, 2025. https://www.transportation.gov/briefing-room/icymi-secretary-duffy-op-ed-golden-age-transportation-will-make-shipbuilding-great
- Kou, Zhen, Liu Xing, and Liu Jian. "Industrial Policy and Overcapacity: Empirical Research of China." In Industrial Upgrading in China in the Era of New Industrial Revolution, 47–80. Singapore: Springer Nature Singapore, 2024.
- Kalouptsidi, Myrto. "Detection and Impact of Industrial Subsidies: The Case of Chinese Shipbuilding." The Review of Economic Studies 85, no. 2 (303) (2018): 1111–1158. https://www.jstor.org/stable/26543912
- Blanchette, J., & Bryan, J. D. G. (2020). Hidden Harbors: China’s State-Backed Shipping Industry. Center for Strategic and International Studies. https://csis-website-prod.s3.amazonaws.com/s3fs-public/publication/207008_Blanchette_Hidden%20Harbors_Brief_WEB%20FINAL.pdf
- Barwick, Panle Jia, Myrto Kalouptsidi, and Nahim Bin Zahur. "Industrial Policy: Lessons from Shipbuilding." Journal of Economic Perspectives 38, no. 4 (2024): 55–80. https://doi.org/10.1257/jep.38.4.55
- Rieffel, L., & Wang, X. (2024, May 1). China’s population could shrink to half by 2100: Is China’s future population drop a crisis or an opportunity? Scientific American.; Al Jazeera. (2025, January 17). China’s population falls for third year in a row as birthrate declines. https://www.aljazeera.com/news/2025/1/17/chinas-population-falls-for-third-year-in-a-row-as-birthrate-declines https://www.scientificamerican.com/article/chinas-population-could-shrink-to-half-by-2100/
- Reuters. "China Plans Bigger, Stronger Social Security Fund to Aid Ageing Society." Reuters, August 20, 2024. https://www.reuters.com/world/china/china-plans-bigger-stronger-social-security-fund-aid-ageing-society-2024-08-20/
- International Maritime Organization (IMO). 2023. Revised Greenhouse Gas Strategy for Global Shipping Adopted. July 7, 2023. https://www.imo.org/en/MediaCentre/PressBriefings/pages/Revised-GHG-reduction-strategy-for-global-shipping-adopted-.aspx
- Kabakc?, Fuat. "South Korean Firms Build 75% of All LNG Carriers Delivered in 2023." Anadolu Agency, July 16, 2024. https://www.aa.com.tr/en/energy/lng-lpg/south-korean-firms-build-75-of-all-lng-carriers-delivered-in-2023/42016
- Maritime Executive. "China Dominates Shipbuilding in 2024: Booking Three-Quarters of Orders." 2024. https://maritime-executive.com/article/china-dominates-shipbuilding-in-2024-booking-three-quarters-of-orders
- Milford, Jarl. "China Dominated Global Shipbuilding in 2024, Expanding in High-Value Markets." Rivier Maritime Media, 2024. https://www.rivieramm.com/news-content-hub/news-content-hub/china-dominated-global-shipbuilding-in-2024-expanding-in-high-value-markets-83427
- Bickenbach, Frank. "EU Concerns About Chinese Subsidies: What the Evidence Suggests." Intereconomics 59, no. 4 (2024): 213–220. https://www.intereconomics.eu/contents/year/2024/number/4/article/eu-concerns-about-chinese-subsidies-what-the-evidence-suggests.html
- Gas Exporting Countries Forum. (2024). Annual gas market report 2024. https://www.gecf.org/_resources/files/events/gecf-unveils-the-annual-gas-market-report-2024/gecf-agmr-2024.pdf
- Davis, Ben. "Lawmakers Introduce SHIPS Act to Revitalize Shipbuilding, Commercial Maritime Industries." Seapower, December 19, 2024. https://seapowermagazine.org/lawmakers-introduce-ships-act-to-revitalize-shipbuilding-commercial-maritime-industries/
- U.S.-China Economic and Security Review Commission. Annual Report to Congress. Washington, DC: U.S. Government Publishing Office, 2023. https://www.uscc.gov/annual-report/2023-annual-report-congress.
- World Trade Organization. China — Certain Measures Concerning the Protection of Intellectual Property Rights (DS549). Geneva: World Trade Organization, 2018. https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds549_e.htm
- United States Trade Representative. Report on China’s Targeting of the Maritime, Logistics, and Shipbuilding Sectors for Dominance. Washington, DC: Office of the United States Trade Representative, January 14, 2025. https://ustr.gov/sites/default/files/enforcement/301Investigations/USTRReportChinaTargetingMaritime.pdf
- Georgiou, Georgios. "As US Blacklists China's Cosco Shipping, Analysts Focus on Trade Impact." Riviera Maritime Media, January 7, 2025. https://www.rivieramm.com/news-content-hub/shipping-analysts-focus-on-trade-impact-following-cosco-blacklisting-by-the-us-83470
- Huang, Qiyi. "Understanding Chinese Bureaucracy: A Systematic Literature Review." International Journal of Social Sciences and Public Administration 3, no. 3 (2024): 267–77. https://doi.org/10.62051/ijsspa.v3n3.32
- Nulimaimaiti, M. "Active, Professional Finance Helps China Claim Shipping Fleet Title from Greece." South China Morning Post, August 14, 2023. https://www.scmp.com/economy/china-economy/article/3231041/chinas-maritime-ambitions-boosted-claims-largest-shipping-fleet-title-greece
- State Council Information Office of the People's Republic of China. "‘Made in China 2025’ Plan Issued." State Council Information Office, May 19, 2015. https://english.www.gov.cn/policies/latest_releases/2015/05/19/content_281475110703534.htm
- China Association of the National Shipbuilding Industry (CANSI). 2002–2024 China Shipbuilding Three Major Indicators. Beijing: China Association of the National Shipbuilding Industry, 2025. https://www.cansi.org.cn/cms/document/10854.html
- Javid, Irum, and Muhammad Ali. "Geopolitical Dynamics of the Pak–China Maritime Cooperation: A Blue Economy Perspective." China Quarterly of International Strategic Studies 9, no. 1–4 (2023): 173–194. https://doi.org/10.1142/S2377740023500094
- Ali, Naade. "Pakistan’s Deepening Strategic Reliance on China." Middle East Institute, October 11, 2024. https://mei.edu/publications/pakistans-deepening-strategic-reliance-china
Mohit Goel
Corresponding author
University of Mumbai, Vidya Nagari, Kalina, Santacruz East, Mumbai, Maharashtra India
Mohit Goel*, Full Steam Ahead China’s Rise in the Global Shipbuilding Industry, Int. J. Sci. R. Tech., 2025, 2 (9), 79-95. https://doi.org/10.5281/zenodo.17108602
10.5281/zenodo.17108602
