Chinese shipbuilding industry

[bsdnf]

Let me share some stories from my family.

My maternal grandfather used to work at Guangdong Machinery Import & Export Co., Ltd in 80s and 90s. The then-CEO followed the trend and established a small shipyard in 2007. However, the 2008 global financial crisis, followed by the European debt crisis, led to a decade-long slump in the shipbuilding market, resulting in unsold ships and halting production.

They lost about a hundred million at the shipyard, adding to the woes that defrauded of tens of millions of yuan by a South African businessman, the company was in dire straits. As a state-owned enterprise, his pensions couldn't be delayed, but younger employees could only be paid very low base salaries, while the older employees were simply waiting for retirement.

The debt was simply too much. In 2014, the shipyard was incorporated into Guangxin Holdings Group, essentially transferring its burden to it's parent state-owned enterprise. This was followed by a decade-long debt and asset restructuring. During this period, the shipyard was limited by its facilities and could only build ships with a deadweight tonnage of no more than 50,000 tons, mainly producing some marine engineering vessels.

Latest news? Last year, under the impetus of the Guangdong SASAC, GSI and Guangxin Holdings reached a cooperation agreement. Guangxin Holdings funded upgrades, while GSI provided orders. The shipyard is now equipped with an 80,000-ton dry dock and a 30,000-ton semi-dock slip, primarily targeting methanol dual-fuel chemical/product oil tankers and marine engineering vessels. Since the cooperation began, GSI has provided at least 2 MR oil tanker order to this ship yard.

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Of course, this has nothing to do with my maternal grandfather; he passed away ten years ago.

This also serves as a reminder that China’s industrial potential is not limited to the current ‘overcapacity’; there are also those who have failed before reaching the current capacity, and their capacity may not necessarily be fully cleared.

 

[tphuang]

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China's first 180,000 m3 LNG carrier that it designed has now been completed. Domestic core component ratio is now above 80%

 

[shiftenter]

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Shipyard capacity is also tightening. Chinese yards continue to dominate global contracting, capturing 70% of orders in Q1, while South Korean builders secured 20%, supported by LNG carrier demand. Japanese yards, meanwhile, have seen their share collapse to just 1%—the lowest level in decades—amid limited capacity and reduced competitiveness.

One of my friend working for a major shipbuilding company in China told me that “China's dockyard operations are booked until 2030. Originally, the military orders were thought to be almost complete, and things would get tough later. Now, civilian ship orders are pouring in.”

 

[ACuriousPLAFan]

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One of my friend working for a major shipbuilding company in China told me that “China's dockyard operations are booked until 2030. Originally, the military orders were thought to be almost complete, and things would get tough later. Now, civilian ship orders are pouring in.”

Hopefully, this won't significantly squeeze out the production slots for new PLAN warships.

Also, it's time for Hudong-Zhonghua to begin work on their even larger drydock (in addition to expanding the current large drydock), damn it.

 

[bsdnf]

I'm not that optimistic.

You can check out Semiconductor Thread; the Trump administration is preparing new leverage for its upcoming trip to China. I strongly believe he will end the Section 301 investigation's extension early or even double down, shipping and shipbuilding industries may face a repeat of last year's impact.

They have no credibility whatsoever.

 

[Michael90]

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One of my friend working for a major shipbuilding company in China told me that “China's dockyard operations are booked until 2030. Originally, the military orders were thought to be almost complete, and things would get tough later. Now, civilian ship orders are pouring in.”

I don’t think military orders are getting complete anytime soon. China is still in the process of building up its navy into a true blue water navy, something that will require at least a decade or two . So not sure about military orders thought to be almost complete.
moreover , since Chinese years are almost getting all booked by civilian companies(mostly foreign ) for the rest of this decade , wouldn’t this affect the PLAN ?

 

[Michael90]

Hopefully, this won't significantly squeeze out the production slots for new PLAN warships.

Also, it's time for Hudong-Zhonghua to begin work on their even larger drydock (in addition to expanding the current large drydock), damn it.

I wonder why they have been so conservative in this aspect, even more puzzling since they are probably the most experienced /advanced shipyard in China , yet their shipbuilding capacity doesn’t match their status at all. Not sure what the issue.

 

[Wrought]

Hopefully, this won't significantly squeeze out the production slots for new PLAN warships.

Also, it's time for Hudong-Zhonghua to begin work on their even larger drydock (in addition to expanding the current large drydock), damn it.

As noted by many sources, including on the previous page, shipyard capacity is expanding fast to meet rising demand.

China is expanding production capacity to meet this demand. China's annual building capacity, which was around 20 million CGT in 2024, is expected to grow to 35 million CGT by 2028. That is close to the current global shipbuilding capacity of 40.5 million CGT. By contrast, Korea, with expected output of 11.17 million CGT this year, remains cautious about large facility expansions due to the aftereffects of restructuring from a prolonged downturn and labor shortages.

Chinese shipbuilders began restarting yards that had halted operations during the 2012 shipbuilding slump about two to three years ago. From this year and over the next three years, they are expected to further boost capacity by focusing on securing new docks and building new yards.

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[Michael90]

As noted by many sources, including on the previous page, shipyard capacity is expanding fast to meet rising demand.

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Good they are expanding capacity. But they should do it cautiously and carefully as well. Don't want to overdo it and having to close down those extra shipyard again when there is a downturn or overcapacity. Guess they will/should be very careful this time and I guess the huge consolidation that happened during the past downturn would have helped.

 

[henrik]

I don’t think military orders are getting complete anytime soon. China is still in the process of building up its navy into a true blue water navy, something that will require at least a decade or two . So not sure about military orders thought to be almost complete.
moreover , since Chinese years are almost getting all booked by civilian companies(mostly foreign ) for the rest of this decade , wouldn’t this affect the PLAN ?

Rather than catering to foreign civilian orders, China should further expand its own trading fleet.