What's Happening?
China has significantly expanded its shipbuilding industry, now accounting for 63.7% of the global orderbook by gross tonnage as of early 2025. This expansion is supported by targeted industrial policies, cost competitiveness, and a comprehensive supply chain. The United Nations Trade and Development's latest analysis highlights that China, along with South Korea and Japan, is leading the global shipbuilding market, with China alone producing over half of the world's shipbuilding output by gross tonnage in 2023. In contrast, the U.S. shipbuilding industry remains minimal, contributing only 0.04% of global output in 2024.
Why It's Important?
The dominance of Asian countries in shipbuilding poses a challenge to Western industries, particularly the U.S., which has seen a decline in its share of the global shipbuilding market. This shift could impact the U.S. economy and its maritime capabilities, as well as influence global trade dynamics. The reliance on Asian shipbuilders may also affect the U.S. defense sector, which depends on a robust domestic shipbuilding industry for naval capabilities. The competitive edge of Asian countries in this sector underscores the need for strategic policy adjustments in the U.S. to revitalize its shipbuilding industry.
What's Next?
As China continues to expand its shipbuilding capacity, the U.S. may need to consider policy reforms and investments to boost its domestic shipbuilding industry. This could involve enhancing technological capabilities and addressing labor issues to compete with Asian counterparts. Additionally, the U.S. might explore partnerships or collaborations with other countries to strengthen its position in the global shipbuilding market.
