South Korean Media: What Impact Does Japan's Revitalization of the Shipbuilding Industry Have?

On February 20, South Korean media outlet CHOSUN Online (Japanese edition) published an article discussing the impact of Japan's revitalization of the shipbuilding industry on China and South Korea.

The article states that after the ruling party led by Highashi Cabinet won the House of Representatives election, making the revitalization of the shipbuilding industry one of the tasks to build a "strong Japan," it has attracted global attention from the shipbuilding industry.

Japan, led by the Highashi Cabinet, views the shipbuilding industry from the perspective of economic security, which is consistent with the U.S. view. Neighboring China is committed to pursuing maritime rights, while Japan, surrounded by the sea, has low self-sufficiency in energy and food and must strengthen the shipbuilding industry to promote marine economic development.

Earlier this month, before the House of Representatives election, the Liberal Democratic Party stated: "Japan accounted for about 40% of the global shipbuilding share in the 1990s, but due to the rise of China and South Korea, it dropped to 8% in 2024," and said, "we will work with the government to revitalize the shipbuilding industry."

With the victory in the House of Representatives election, it is generally believed that the shipbuilding industry will become an important core industry that Japan focuses on supporting.

In the global shipbuilding industry, China has occupied more than half of the market share in the past four to five years, South Korea accounts for 20-30%, and Japan accounts for about 10%. The focus of attention is whether the shipbuilding industry driven by a "strong Japan" can bring about changes in this share.

Firstly, in the "Shipbuilding Industry Revitalization Roadmap" announced by the Japanese government at the end of last year, it set a goal to double the current shipbuilding volume (18 million tons) by 2035. In addition, before the House of Representatives election, the Liberal Democratic Party listed the shipbuilding industry as one of 17 growth strategy areas in its election promises, alongside artificial intelligence (AI) and semiconductors.

The core content is that the Japanese government will invest 1 trillion yen in both public and private sectors over the next decade, and even consider establishing a "state-owned shipyard" if necessary. The so-called 1 trillion yen shipbuilding fund will be established initially with about 380 billion yen each from the government and the shipbuilding industry, with the rest covered by public funds. The funds will be used in stages for the expansion, restart, and construction of shipyard infrastructure. The goal is to have automated equipment fully operational starting in 2028, and to achieve full-scale production growth after expanding the docks in 2034.

The Highashi Cabinet also plans to implement a "National Japan" strategy, integrating the shipbuilding industry, shipping industry, and logistics policies to target the next-generation ship market. Japanese shipowners invest in shipyards, jointly develop next-generation ships, and then order these vessels from their own shipyards. This is an attempt to regain orders from South Korea and China using their own strength.

Three major Japanese shipping companies have decided to invest in the design of next-generation ships initiated by Imabari Shipbuilding and other companies, and this strategy is already being implemented.

Japan also introduced the concept of "National Docks" last year to support this goal. It is a model similar to a "National Shipyard," where the government builds docks, renovates and renews outdated facilities, and leases them to private shipbuilding companies.

Currently, the price of steel, which accounts for about 30% of shipbuilding costs, is about 20% higher than in China, giving it poor price competitiveness. Given the Highashi Cabinet's active push for tax reduction policies, it will also promote tax incentives for core materials and parts industries such as steel, ultimately driving down shipbuilding costs.

However, there are also people who are skeptical about the revitalization plan. Whether labor shortages, aging population, and declining productivity can be overcome within a few years remains questionable. Since the mid-2010s, these issues have become increasingly severe in Japan, and they will also be affected by the global downturn in the shipbuilding industry.

Additionally, large shipbuilding companies such as Mitsubishi Heavy Industries have gradually reduced their operations and closed shipyards. Therefore, the production capacity of shipyards has declined compared to South Korea and China.

In an interview with the Japanese business magazine Nikkei Business, Mr. Yukiaki Okamura, president of Hitachi Zosen Corporation, said, "Setting goals is good, but considering the changes in demand, the availability of human resources, and the time required to increase equipment, I think the goal of doubling the construction volume by 2035 is difficult to achieve."

In Japan, some people point out that "the so-called revitalization of the shipbuilding industry is just a political slogan to appease the pressure from the United States."

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Original: toutiao.com/article/1857613117068427/

Statement: This article represents the views of the author.