China's leading ship enterprises enjoy the dividend of share improvement and structural upgrading

The center of the global shipbuilding industry is gradually shifting to China

From the 1890s to the 1960s, European countries dominated by the United Kingdom dominated the market. In the 1890s, Britain was at its peak, controlling massive trade flows, dominating the maritime industry, producing more than 80% of the world's ships and owning half the world's fleet. But with each world war, the British Empire shrank in size, the merchant fleet was weakened by wartime losses, and its trading partners became better able to conduct their own trade. As control over trade faded, so did shipping, and by 1960 the British fleet had slipped to just 20% of the world's tonnage. Europe's shipbuilding industry as a whole has gone through much the same boom-and-bust cycle as Britain's. Despite the closure of many shipyards, some have managed to diversify into high value-added vessels in niche markets where Far East shipyards have no competition. These markets include container ships, cruise ships, oil tankers, chemical tankers and many smaller vessels such as dredgers. All of these vessels are equipment-intensive, which allows the European equipment industry to remain at the forefront of design and development, for example in engines, cranes and engine room equipment.

In the 1950s, Japan overtook Europe and reached a 50% market share in 1969. Like Britain, Japan was an island nation, and post-World War II economic growth placed high demands on shipping. Initially, the development of the Japanese shipbuilding industry benefited from coordinated shipping and shipbuilding programs. Between 1951 and 1972, 31.5% of the total loans of the Japan Development Bank were for Marine transport. This domestic shipbuilding program has undoubtedly contributed to the success of the Japanese shipbuilding industry. In the 1990s, Japan was challenged by South Korea, whose shipyards faced high labor costs and an appreciating currency. In the face of these headwinds, Japan has remained highly competitive by increasing productivity through the use of production planning, production engineering and subcontracting. In the 1980s, Korean shipbuilding production grew rapidly, challenging Japan's dominance and eventually establishing the Far East as a shipbuilding center of the world. Unlike the United Kingdom or Japan, starting with low labor costs and large, efficient facilities, South Korea was the first country to build its business primarily around export markets, with a product range focused on large ships. With the development of international registrations and multinational corporations, the link between ships, shipowners and national interests is increasingly weak. The industry is also more concentrated, with a small number of very large shipyards focusing on large ships for the international market. By the mid-1990s, South Korea had a 25% market share and four of the world's top five shipyards.

As part of China's industrial expansion, the major expansion of China's shipbuilding capacity accelerated in the late 1990s, and China's importance began to increase, creating a tripartite situation between China, Japan and South Korea. At the beginning of this century, China's rapid economic growth, gradually become one of the world's largest consumer markets, import and export trade volume continues to increase, from 2003 to 2007, the total value of China's import and export surged from 851.2 billion US dollars to 2.17 trillion US dollars, an increase of 155.38%, a compound growth rate of 26.41%. Most of the import and export trade is completed by sea transportation, and the active economic trade effectively promotes the development of shipping industry and shipbuilding industry. At the same time, China's low labor costs and solid industrial base promote the gradual rise of China's shipbuilding industry in the international market, in 2008, in terms of deadweight tons (DWT), China's shipbuilding industry in the completion of shipbuilding, new orders and hand-held ship orders in these three indicators are more than Japan, ranking second in the world. In 2010, China surpassed South Korea in the three major shipbuilding indicators (DWT) and became the world's largest shipbuilding country.

2 Chinese shipyards have seen a significant increase in orders for high value-added ship types

China's shipbuilding industry rose in the last round of industry cycle, its product structure is mainly low value-added vessels. In the last cycle, China's shipbuilding industry, relying on comparative advantages such as labor costs, mainly focuses on the manufacture of low value-added vessels. Calculated by CGT, the new orders for dry bulk carriers account for a relatively large proportion, more than 60%, and China accounts for more than 50% in the world dry bulk carrier market. On the other hand, China has shown its weak capabilities in the field of high value-added vessels such as LNG/LPG, VLCC/ULCC, and large container ships. In the last cycle, in terms of the number of ships, these three types of high value-added vessels accounted for no more than 10% of China's new ship orders (except 2015). Among them, because the global LNG and LPG markets are basically monopolized by South Korea, the proportion of gas ships in China's new ship orders is very low, and China's share in the world gas ship order market is only about 10% (in CGT).