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In only two decades, China has grown to be the dominant player in shipbuilding, claiming more than half of the world’s commercial shipbuilding market while the US share has fallen to just 0.1 per cent, posing serious economic and national security challenges for the United States and its allies, according to a report released by the Center for Strategic and International Studies.
In 2024 alone, one Chinese shipbuilder constructed more commercial vessels by tonnage than the entire US shipbuilding industry has built since the end of World War II. China already has the world’s largest naval fleet, the Washington-based bipartisan think tank said in its 75-page report released March 11.
“The erosion of US and allied shipbuilding capabilities poses an urgent threat to military readiness, reduces economic opportunities, and contributes to China’s global power-projection ambitions,” the report said.
Concerns about the poor state of US shipbuilding have been growing in recent years as the country faces rising challenges from China, which has the world’s second largest economy and has ambitions to reshape the world order. At a congressional hearing in December, senior officials and lawmakers urged action.
In early March, US President Donald Trump told Congress that his Republican administration would “resurrect” the American shipbuilding industry, for commercial and military vessels, and he would create “a new office of shipbuilding in the White House”.
In February, the heads of four major labour unions called on Trump to boost American shipbuilding and enforce tariffs and other “strong penalties” against China for its increasing dominance in that sector.
“What we are seeing now is a recognition of the strategic significance of shipbuilding and port security and the related challenges posed by China,” said Matthew Funaiole, a senior fellow in the China Power Project at CSIS and a co-author of the report. Funaiole said concerns over shipbuilding are “a fairly bipartisan issue”.
The report said that China’s shipbuilding sector went through “a striking metamorphosis” in the past two decades, transforming from a “peripheral player” to the dominant player on the global market, with efforts centred on one state-owned enterprise, China State Shipbuilding Corporation, or CSSC.
At the same time, China has greatly expanded its navy. Last year, a CSIS assessment found that China was operating 234 warships, compared with the US Navy’s 219, although the US continued to hold an advantage in guided missile cruisers and destroyers.
In developing recommendations for the US to compete with China, the researchers zoomed in on the Chinese company’s use of Beijing’s “military-civil fusion” strategy, which blurs the lines between the country’s defence and commercial sectors.
They found that CSSC, which builds both commercial and military ships, sells three-quarters of its commercial production to buyers outside China, including to the US-allied Denmark, France, Greece, Japan, and South Korea. Thus, these foreign firms are funnelling billions of dollars to Chinese shipyards that also make warships, advancing China’s modernization of its navy and providing Chinese defence contractors with key dual-use technology, the report said.
The CSIS researchers suggested that as a long-term fix, the US should invest in rebuilding its shipbuilding industry and work with allies to expand shipbuilding capacities outside China. For the near term, they recommended actions to level the playing field and “disrupt China’s murky dual-use ecosystem,” such as by charging docking fees on Chinese-made vessels and cutting US financial and business ties with CSSC and its subsidiaries.
The Trump administration has proposed new fees on China-linked vessels calling on US ports. A BlackRock-led consortium has agreed to acquire stakes in 43 ports across the globe, including the two ports on either side of the Panama Canal, from a Hong Kong-based conglomerate.
AP
English (US) ·