Chinese shipbuilding industry

weig2000

Junior Member
CSIC-CSSC merger confirmed. This says a lot of what's happening with the global shipbuilding industry that is facing massive gluts and layoffs. This follows as Korea is trying to merge the shipbuilding arm of HHI with that of Daewoo into a super entity.

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In the light of the CSIC GM Sun Bo's conviction, I believe there are also more reasons for the merger under the surface. This is a major loss of CSIC, as I see this merger more like CSSC absorbing CSIC. This is also a tale of North which is CSIC vs. South, which is CSSC. CSSC has the yards from Guangzhou to Shanghai, while CSIC has Dalian and Bohai.

CSSC has been the more successful and dominant of the two entities, and practically made the heart of the PLAN's surface fleet. The Type 055, 052B/C/D, the 054A and the 056 corvettes were all designed and originally made in CSSC yards. In addition, the Type 071, 075 and the Type 003 are made or going to be made in CSSC. The supply ships, like Type 901 and 903, are all built in CSSC yards. They also pumped out the ELINT ships, the military tugs, the sonar surveillance ships and even the Yuan Wang space tracking ships. What ships do CSSC doesn't make? In terms of commercial shipping, CSSC yards are building high end stuff like LNG carriers --- with HDZ looking to building the world's largest LNG carrier ---- and a CSSC yard built the world's first Arctic condensate and semi ice breaker tanker, the Boris Sokolov. The Boris Sokolov made an incredible journey to the Arctic Circle, then ported into the ice laden waters in Murmansk.


CSIC made the submarines, including Yuan, refitted the ex-Soviet carrier into the Liaoning, and made the first domestic Chinese carrier, the Type 002. CSIC's shipyards are Dalian are "licensed" to produce 052D and 055 in order to increase capacity and production --- only one Dalian 052D has been accepted by the PLAN so far. But the last original Dalian design was the 051C, which seemed like an aging ship in today's rapid progress.

But overall, while CSSC has been a successful SOE, CSIC has been losing tremendous amounts of money and has been suspected of deep corruption, leading to the arrest of Sun Bo. CSIC has been the model definition of an inefficient SOE that has been sucking up state funds, while CSSC has been a model of a successful SOE, the so called state champion that China wants to push forward. CSSC's ship owning or leasing arm has been robust, that its planning its own IPO.

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With the downward global pressure on ship building demand, there is little room left for CSIC, with the only route being a so called merger, that in my opinion, is a de facto take over of CSIC by CSSC. The SOE champion eating up the SOE chump. This is classic SOE consolidation with the state deciding who is the winner and who is the loser.

With this coming in the light of continued PLAN modernization, the behind the doors effect can be immensely profound in untold ways.
Good summary and overview. It feels like CAC vs SAC in the military aircraft industry, although both CSSC's and CSIC's main business are civilian shipbuilding.

This is classic SOE consolidation with the state deciding who is the winner and who is the loser.
Well, winner and loser have really been decided by the market, as you have summarized very well above. The state pulls the trigger.
 

Tam

Captain
Registered Member
I should add that Liaoning --- the province, not the ship --- got singled out for being heavy on money losing SOEs and the Dalian shipyards belong here. The province has an economic growth of 6.1% which is below the national average. Liaoning is part of China's rust belt, which also includes Heliojiang. Come to think of it Shenyang where SAC is located, is the capital of Liaoning, and so the comparison of CSSC vs. CSIC is similar to CAC vs. SAC. The prosperous China south vs. the rust belt China north. Another problem with China's rust belt is that the young and talented in these areas are moving south, which worsens the problem for the industries in these province, and no doubt this can have implications with the SOEs and military industrial complexes there.
 

FriedRiceNSpice

Senior Member
But traditionally china’s north had the heavy industries

Because it was transferred from Soviet Union?
Actually dates back to early Republican times/Warlord era. Reasons include easy access to coal via large deposits in the area, abundance in natural resources, terrain, and Russian/Japanese railroads and infrastructure. Later Japanese continued to build up industry after they occupied the region, and it was a critical component of Japanese wartime industrial economy. Soviets actually swept in and plundered many of the industrial assets of the area in the last month's of WW2. Although later on, the Soviets did send technical advisors to help in modernizing China's industrial base, at least up until the Sino Soviet split. But the Soviets never "transferred," industry to Manchuria.
 

AndrewS

Captain
Registered Member
Actually dates back to early Republican times/Warlord era. Reasons include easy access to coal via large deposits in the area, abundance in natural resources, terrain, and Russian/Japanese railroads and infrastructure. Later Japanese continued to build up industry after they occupied the region, and it was a critical component of Japanese wartime industrial economy. Soviets actually swept in and plundered many of the industrial assets of the area in the last month's of WW2. Although later on, the Soviets did send technical advisors to help in modernizing China's industrial base, at least up until the Sino Soviet split. But the Soviets never "transferred," industry to Manchuria.
If anything, it was the Japanese that transferred industry to Manchuria.

During WW2, Manchuria produced more steel than the Japanese Home Islands.
And the Mitsubishi Zaibatsu actually relocated their headquarters from Japan to Manchuria
 

Tam

Captain
Registered Member
Three more Chinese shipbuilders are set to be merged.

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CIMC is best known for containers, probably the world's leading manufacturer of such. Its common to see a CIMC made container on every port. But they also build ships?

And why does AVIC have a ship yard? Don't they build airplanes?
 

Tam

Captain
Registered Member
This titanic ship, seen in recent pictures of the Jiangnan Shipyard, is highly likely to be the newest member of COSCO Shipping's Universe class. Not the largest container ship but among the largest, and is the largest made in China container ship class, checking in at over 21,000+ TEU and 400 meters long. This ship should be one of a fleet recently contracted by COSCO to Jiangnan Shipyard. Look at how the 052DG is dwarfed behind it.

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Screenshot 2019-08-03 at 2.34.58 PM - Edited.png cosco-shipping-universe_9795610_2346909_Medium.jpg
 
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