Japanese Media: The Dream and Reality of Japan's "Shipbuilding Doubling" Plan

Last December, Japan's Ministry of Land, Infrastructure, Transport and Tourism (MLIT) released the "Shipbuilding Revitalization Roadmap," aiming to double new shipbuilding output from the current 9 million gross tons to 18 million gross tons by 2035. Can Japan's shipbuilding industry make a comeback?

Although the Japanese government has set a goal to double construction volume, what strategy does Japan have amid soaring raw material prices and severe labor shortages? For years, Japan's shipbuilding industry has underperformed. Can it catch up with China and South Korea—the two global giants in shipbuilding?

Japan once accounted for nearly half of the world’s commercial ship production before the 1980s, but its market share has since declined sharply due to the rise of shipbuilding industries in China and South Korea. South Korea began significant growth in the 1990s, while China gained momentum starting in the 2000s. As of 2024, China holds a dominant 71% share, South Korea shows stagnation at just 14%, and Japan accounts for only 8%.

Owing to long-term decline, the Japanese shipbuilding sector has experienced restructuring and widespread layoffs, leading to a shrinking number of shipyards and the departure of skilled professionals. Numerous prominent companies that led the industry in the 1980s—such as Mitsubishi Heavy Industries and Ishikawajima-Harima Heavy Industries (now IHI)—have been forced to scale down operations.

For large vessels like oil tankers, Japan can no longer compete with China and South Korea, whose construction costs are significantly lower. Shipbuilding-related majors have disappeared from university curricula, and the Shipbuilding Division under the Maritime Affairs Bureau underwent organizational restructuring in 2008. These developments symbolize the fading glory of Japan’s once-thriving shipbuilding industry.

The most representative sign of Japan’s shipbuilding decline is its current inability to build liquefied natural gas (LNG) carriers. LNG offers advantages such as lower carbon dioxide (CO₂) emissions compared to heavy fuel oil, and global demand for LNG surged starting in 2000. Consequently, demand for new ships has risen sharply. Although Japanese shipyards still possess the capability to build LNG carriers, the prevailing “box-type” tanks (membrane-type) now outperform Japan’s traditional “bowl-shaped” (spherical) tank designs in transport efficiency. This has caused Japan to rapidly fall behind in LNG carrier technology.

Since 2019, Japan has recorded zero new LNG carrier orders. Yet, Japanese power companies import vast quantities of liquefied natural gas from Australia and other countries. From an energy security standpoint, Japan should be building LNG carriers, and there have indeed been calls to resume construction. However, once manufacturing capabilities are disrupted, it is extremely difficult to restore them overnight.

According to MLIT surveys, Japan’s shipbuilding workforce numbered about 91,000 in 2016 but dropped to 68,000 in 2022 due to the pandemic. By 2025, the total rose again to 76,000 thanks to increased foreign workers—but securing sufficient operational staff remains increasingly challenging.

Beyond shipbuilding, the Japanese government is also investing heavily to catch up in next-generation semiconductors and other advanced technologies. This sector attracts many workers into on-site roles and offers better pay. With Japan’s labor shortage worsening, the shipbuilding industry struggles to assemble enough workers—making it nearly impossible to achieve the government’s goal of doubling output.

Under such difficult circumstances, in January this year, Mr. Yukio Higashi, President of Nippon Shipbuilding Association and head of the industry leader Nagasaki Shipbuilding Company, announced during a press conference that his company would absorb the second-largest player in the industry, Japan Marine United (JMU), as a subsidiary. He stated: “Around 2010, Japan’s shipbuilding volume still reached 19 million gross tons. There is no reason why we cannot continue increasing from today’s 9 million gross tons.”

Yet in recent years, China has increasingly won orders from Japanese shipowners, while Japan’s shipbuilding industry continues to retreat. Meanwhile, China is pushing massive capital investments with strong government support, and South Korea is expanding facilities through public-private partnerships. Although the Trump administration in the U.S. announced strict measures against Chinese-made ships starting in 2025, these measures have been repeatedly delayed in implementation. While Chinese shipyards have indeed seen some impact on new orders, Japan’s major shipbuilders still have orders not scheduled for completion until three years from now—meaning they have yet to seize any real opportunity.

Original article: toutiao.com/article/1862954831407180/

Disclaimer: The views expressed in this article are those of the author alone.