WASHINGTON — Over the past twenty years, China has established itself as the leading force in global shipbuilding, capturing more than 50% of the world’s commercial shipbuilding market. In stark contrast, the United States has seen its share diminish to a mere 0.1%, which presents significant economic and national security issues for the U.S. and its global partners, as per insights from the Center for Strategic and International Studies (CSIS) published in a report on Tuesday.
Remarkably, in 2024, a single Chinese shipyard was responsible for producing more commercial vessels by tonnage than the entire U.S. shipbuilding sector has managed since the conclusion of World War II. China’s navy is now the largest in the world, underscoring its growing maritime power, stated the 75-page report by the bipartisan Washington think tank.
The report emphasized that the diminishing capabilities of U.S. and allied shipbuilders pose a critical threat to military preparedness, limit economic growth, and enhance China’s ambitions to project power globally.
In recent times, there has been increasing anxiety over the U.S. shipbuilding decline, fueled by the challenges posed by China, which possesses the globe’s second-largest economy and aims to influence the world order. At a congressional session in December, there was a strong call from top officials and legislators for proactive measures.
Recently, the former President addressed Congress, announcing efforts to revive the American shipbuilding sector for both commercial and military vessels, along with plans to establish a new office dedicated to shipbuilding within the White House. “We used to make so many ships,” he remarked. “We don’t make them anymore very much, but we’re going to make them very fast, very soon. It will have a huge impact.”
In February, leaders from four prominent labor unions urged the then-President to enhance U.S. shipbuilding and impose tariffs and substantial penalties on China for its dominant standing in this industry.
Matthew Funaiole, a senior fellow at CSIS, highlighted the growing understanding of the strategic importance of shipbuilding and port security, along with the challenges posed by China. He noted that shipbuilding concerns are tackled as a bipartisan issue.
The report outlined that China’s shipbuilding industry underwent a remarkable transformation over the past two decades, evolving from a marginal player to the leading power in the global market. This growth was primarily fueled by the efforts of a single state-owned entity: China State Shipbuilding Corporation (CSSC).
Alongside this, China has substantially expanded its naval forces. A CSIS evaluation from last year indicated China had 234 warships in active service, surpassing the U.S. Navy’s 219, though the U.S. maintained an edge in advanced warship categories, including guided missile cruisers and destroyers.
To enhance competitiveness against China, researchers suggested focusing on China’s “military-civil fusion” strategy, which mixes its defense with commercial shipbuilding sectors. It was observed that CSSC, encompassing both commercial and military ship production, exports about three-quarters of its commercial output to international buyers, such as U.S. allies like Denmark, France, Greece, Japan, and South Korea.
These international clients contribute billions to Chinese shipyards that also produce warships, enabling China to advance its naval capabilities and equip its defense contractors with critical dual-use technologies, the report elaborated.
The CSIS experts advised that, in the long run, the U.S. should focus on revitalizing its shipbuilding capacities and collaborate with allies to expand shipbuilding endeavors beyond China. For immediate measures, they proposed actions to create a fair competition landscape and “disrupt China’s murky dual-use ecosystem,” including implementing docking charges on Chinese vessels and severing U.S. business and financial connections with CSSC and its affiliates.
The former administration initiated plans to introduce new fees for China-linked ships docking at U.S. harbors. Additionally, a consortium led by BlackRock recently consented to acquire interests in 43 ports globally, including two pivotal ports flanking the Panama Canal, from a conglomerate based in Hong Kong.
