On the back of last year’s development and government assistance, the thriving Chinese shipbuilding industry is all set to shine in coming years also.
According to the Ministry of Industry and Information Technology, new ship orders in China grew by a factor of 9.5 to 8.26 million deadweight tons (DWT) in Q1 2010, thereby accounting for 47.8% of the world's total, as per the news published by Alibaba
During Q1 2010, production of completed ships in China reached 14.57 Million DWT, up 128% year on year, representing 41.1% of the global production.
However, at the end of March 2010, country’s total shipbuilding orders totaled 184.1 Million DWT, down 2.2% from the end of 2009. The total orders in hand account for 37.3% of the world's total, and 88% of these are intended for export.
Due to increase in the shares of world’s shipbuilding market last year, China experienced a year-on-year growth of over 40% in shipbuilding completion volume. Another reason for this growth is that in 2009, the newly signed shipbuilding orders, for the first time surpassed South Korea and secured the top spot in global ranking.
Technological innovation and cheap labor is also responsible for the continuous growth of China’s shipbuilding industry. Even if we include productivity differences, labor cost in China is fairly less than that in Korea and Japan. Then, the country is also the world’s cheapest manufacturer of steel. This factor helps the yards to trim down the cost and reduce the prices of shipbuilding in the world market.
The industry is also supported by the Adjustment and Revitalization Plan of Shipbuilding Industry approved on February 11, 2009. The Government, under the plan, motivates the financial bodies to amplify credit funds for the buyers of ship exports. The Government also backs oceanographic engineering equipments, high-tech ships and research on key corollary equipments.
According to a market research report titled “China Shipbuilding Industry Forecast
” by RNCOS
, due to these supporting factors together with its intense stress on furthering logistic industry, the Chinese shipbuilding industry is projected to grow and accelerate the process of expanding manufacturing base of the country to lower-cost interior regions.
According to Research Analyst at RNCOS
, “To witness more development in the sector, country’s government needs to work on the lines of giving encouragement to the updation of old ships. Further, the country must use the latest added central investment for technical reforms and industry revitalization.”
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