China's lead in global shipbuilding may already be fading, new data suggests

The Star

15 hours ago

China's dominance of global shipbuilding appears to have been eroded over the past six months, according to the latest industry data, suggesting that US efforts to rein in the country's shipyards may be starting to bite.
China has been by far the world's largest shipbuilder for years, but its shipyards saw new orders plunge 68 per cent year on year to 26.3 million deadweight tonnes in the first half of 2025, according to a Monday report from maritime consultancy Clarksons Research.
South Korea, the second-largest player in the industry, saw new orders decline by 7 per cent year on year to 14.2 million deadweight tonnes, but that meant the country gained ground against China in relative terms.
China secured 56 per cent of global new orders in the first half of the year, down from 75 per cent a year earlier, while South Korea's share rose from 14 per cent to 30 per cent, according to the Post's calculations.
Analysts said China's shrinking market share was being driven by US curbs targeting its shipbuilding industry, as well as a broader downturn in global demand. This decline is largely attributed to concerns among shipowners worldwide over US measures targeting China's shipbuilding industry
'This decline is largely attributed to concerns among shipowners worldwide over US measures targeting China's shipbuilding industry and their subsequent efforts to adapt,' said Han Ning, general manager of the Singapore branch of SHIPBID, a ship bidding platform.
Washington has announced a string of measures targeting Chinese shipbuilders this year, as US President Donald Trump vowed to revitalise America's shipyards and curtail China's dominance of the industry.
In April, the US announced it would charge steep fees to any ships owned, operated or built by China entering an American port. It has also placed high tariffs on Chinese-made equipment used by shipyards, such as ship-to-shore cranes.
The measures have provoked strong industry backlash, but they appear to have had an impact on the market. In addition to shipbuilding, Chinese shipyards have also seen their market share decline in vessel repair and maintenance, according to Han.
China's share in the repair and maintenance of very large crude carriers – a type of oil tanker – averaged about 70 per cent between 2021 and 2024, but fell to roughly 50 per cent in the first half of this year, Han added.
But a cyclical drop in global demand is also a key driver behind China's falling market share, according to Ralph Leszczynski, head of research for shipbroking and shipping services group Banchero Costa.
During periods of high demand – such as from 2021 to 2024 – orders that cannot be handled by Korean and Japanese shipyards, which have strictly limited capacity, often spill over into the more flexible Chinese market, he explained.
However, the number of new orders has significantly dropped after the boom of the previous few years, meaning that there has been less of a spillover effect in 2025. Shipowners often prefer vessels made by Korean or Japanese shipyards as they are easier to sell on the second-hand market, according to Leszczynski.
'Large and well-established Chinese shipyards have little to worry about,' Leszczynski said. 'But this situation should be of concern to smaller, private yards with a smaller track record.'
Chinese-built vessels account for 23 per cent of the total global fleet in service, according to Clarksons.
The US drive to revive its shipbuilding industry is widely seen as an opportunity for South Korea. With America having practically zero domestic capacity, Korea's top shipbuilders are now expanding in the US.
Hyundai Heavy Industries (HHI) and Hanwha Ocean, two major South Korean shipbuilders, have joined bids for contracts to maintain, repair and overhaul US Navy vessels since last year.
In April, HHI signed a memorandum of understanding to accelerate cooperation and technology sharing with Huntington Ingalls Industries, the largest military shipbuilder in the US.
Despite ongoing trade tensions, South Korea and the US were deepening cooperation – particularly in shipbuilding – as Washington ramped up restrictions on China, South Korean President Lee Jae-myung said in March.
Lee, who took office last month, has also pledged to make South Korea 'a maritime power that leads the world, beyond shipbuilding'. - SOUTH CHINA MORNING POST