China’s Resilient Shipbuilding Industry: Navigating US Sanctions

• A study commissioned by the Chinese Academy of Engineering reveals that China’s shipbuilding industry continues to thrive despite US sanctions.
• With almost all components locally sourced, Chinese shipyards achieved record growth in 2023, witnessing a nearly 12% YoY increase in completions.
• The study, focusing on the industry’s resilience, outlines potential supply chain risks and emphasizes the need for preparedness against escalating sanctions, shedding light on China’s dominance in shipbuilding.

China’s Shipbuilding Triumph Amidst Sanctions

Chinese shipyards, resilient against US sanctions targeting the PLA Navy’s expansion, showcased remarkable growth in 2023, with completions soaring nearly 12% YoY to 42.32 million deadweight tonnes. Despite Trump-era restrictions, the China Association of the National Shipbuilding Industry reported a 56% increase in new orders, solidifying China’s global shipbuilding dominance. The study, commissioned by the Chinese Academy of Engineering, delves into the factors contributing to this resilience.

Components Availability and Local Sourcing

The research, led by Professor Liu Cungen from Shanghai Jiao Tong University, unveils that Chinese shipyards maintain access to almost all components from local sources. While some technological gaps persist, the study emphasizes China’s rapid advancements, attractive pricing, and growing market potential. The strategic competition approach by the US is acknowledged to impact China’s marine equipment industry, with specific challenges outlined.

Supply Chain Risks and Areas of Concern

The study identifies specific ship types facing higher supply chain risks, such as large liquefied natural gas carriers and luxury cruise liners. Challenges in manufacturing key components for LNG carriers are highlighted, indicating potential vulnerabilities. While China leads globally in shipbuilding capacity, the study underscores difficulties in sourcing components for certain advanced ship types. Propulsion systems for luxury vessels and specific equipment for luxury cruise liners pose challenges in domestic supply.

Recommendations and Future Preparedness

Researchers emphasize the need for an accurate assessment of the current situation, anticipating further sanctions, and preparing for self-defense and countermeasures. Despite China’s shipbuilding prowess, the study recommends formulating countermeasures in advance to maintain resilience against potential US-led sanctions. The need to break international monopolies, especially in supporting industries, is underscored. The study calls for proactive measures to secure the supply chain, addressing import dependencies despite China’s significant production capabilities.

The study concludes that while China’s shipbuilding industry boasts unparalleled strength, challenges persist, necessitating strategic planning and resilience against potential escalations in geopolitical tensions.

Did you subscribe to our daily Newsletter?

It’s Free! Click here to Subscribe

Source: SCMP

• 
• 
• 
• 
• 
• 
• 
•