[Source / Observer Network Columnist: Mind Insight Institute]
In the century-long upheaval of the global shipbuilding industry, the transfer of dominance has always been accompanied by collisions of technology, scale, and national will. From the UK in the 19th century, to post-war Japan, and then South Korea in the late 20th century, the crown of the shipbuilding industry has changed hands several times.
Now, history's wheels are rolling forward. China has decisively ended South Korea's 20-year hegemony with a thunderous force. In 2024, China's shipbuilding industry took 74.7% of new ship order shares, comprehensively rewriting the global shipbuilding landscape.
This is not only an industrial victory but also a vivid portrayal of the rise of China's comprehensive national strength and the reshaping of the global trade pattern. What exactly enabled China's shipbuilding industry to grow from a marginal player into an unshakable global king? How did this 14-year game with South Korea evolve into a "crushing" situation for China?
From "Three Kingdoms Kill" to "Dual Dragon Summit": The 14-Year Battle Between Chinese and Korean Shipbuilding
The history of the global shipbuilding industry is a competition history of major countries' industrial power.
As a capital-intensive industry, shipbuilding is highly dependent on global trade and economic cycles. Each global economic recovery or surge in shipping demand (such as the oil tanker boom in the 1960s and the globalization wave in the 2000s) provides opportunities for low-cost countries to rise.
In the 1960s, Japan ended the shipbuilding hegemony of Europe and America that had lasted for more than a hundred years with efficient production and technological innovation, once reaching a market share of 50%. In the 1980s, South Korea and China began to emerge, and the global shipbuilding industry entered the East Asian "Three Kingdoms Kill" era. In 2000, South Korea surpassed Japan with a market share of 40%, becoming the world's number one, while China at that time accounted for only 4% of the orders, remaining on the fringes.
2010 was a key year for China's shipbuilding industry. That year, China surpassed South Korea for the first time, joining the ranks of the top tier globally. However, the "global number one" position was not stable. Over the next decade, China and South Korea engaged in fierce competition in terms of order volume, technical level, and market share, with alternating victories and defeats.
Until 2021, China's shipbuilding industry began to truly pull away from South Korea. According to data from China's Ministry of Industry and Information Technology (MIIT) and the China Association for Shipbuilding Industry (CANSI), in the first three quarters of 2024, China led the world comprehensively in the three key indicators of shipbuilding—completion volume (55.1%), backlog orders (61.4%), and new orders (74.7%), while South Korea accounted for 25.6%, 24.1%, and 17%, respectively.
Specifically, China's new order volume reached 87.11 million deadweight tons (DWT), growing by 51.7%; backlog orders amounted to 208.72 million DWT, accounting for 61.4% of the global total; and completion volume was 48.18 million DWT, representing 55.1% of the global total. South Korea's new order volume was only 10.98 million corrected gross tons (CGT), with its market share falling to 17%, marking an eight-year low.
New order volume, as a wind vane for the future development of the shipbuilding industry, is the focal point of competition between China and South Korea. In the first three quarters of 2024, China maintained the top spot for seven consecutive months, while South Korea led for only two months. In July, South Korea secured 40% of the orders, briefly surpassing China; but in September, China returned strongly with 90% of the market share, firmly establishing its leading position. This intense "back-and-forth battle" is behind China's comprehensive breakthroughs in scale, technology, and industrial chains.
The Rise Code of Chinese Shipbuilding
China's shipbuilding industry's reversal stems from the coordinated efforts of scale, technology, and industrial chains, forming an unparalleled competitive advantage.
China possesses the largest shipbuilding capacity globally, handling 71% of the world's orders in 2024 (measured in CGT). Among these, container ships accounted for 83%, dry bulk carriers 78%, and oil tankers and chemical carriers 76%. China State Shipbuilding Corporation (CSSC) formed a closed-loop system from design, procurement to construction through the integration of its shipyards, far outperforming South Korea's dispersed shipbuilding enterprises. CSSC-affiliated shipyards such as Hudong-Zhonghua and Waigaoqiao Shipbuilding not only dominate traditional ship types but are also gradually entering the high-end ship market. In 2024, CSSC announced the absorption of its subsidiary, China Shipbuilding Heavy Industry Group, further optimizing resource allocation and consolidating its global leadership position.
Taking Jingjiang, a county-level city, as an example, it has become a microcosm of China's shipbuilding industry. In 2022, Jingjiang's shipbuilding completion volume accounted for 9.3% of the global total and 19.7% of the national total, while new order volume accounted for 10.2% of the global total and 18.5% of the national total. Its backlog orders accounted for 10.7% of the global total and 21.8% of the national total. Jingjiang's Yangzi River Shipyard and New Times Shipbuilding ranked first in national backlog orders and completion volumes, respectively. In 2023, they signed China's first Liquefied Natural Gas (LNG) carrier contract for a private shipyard, breaking South Korea's monopoly in the high-end ship type market.
Jingjiang's success stems from its "misaligned competition" strategy: focusing on small to medium-sized ships ranging from 10,000 to 50,000 tons initially, and gradually expanding to 400,000-ton giants, forming scaled and clustered industrial advantages.
In summary, the transfer of shipbuilding supremacy naturally depends on technological breakthroughs. Emerging countries, by introducing advanced technologies and combining them with local innovations, gradually narrow the technological gap and ultimately achieve surpassing. This is an inevitable law.
As a strategic industry, shipbuilding also relies heavily on strong government support. Japan's "Economic Revitalization Plan," South Korea's "Heavy Chemical Industrialization," and China's "Shipbuilding Industry Revitalization Plan" all propelled the industry's growth through subsidies, tax incentives, and state-owned enterprise consolidation. National will played a crucial role in resource allocation and technological upgrades.
The competitiveness of the shipbuilding industry lies not only in shipyards themselves but also in complete industrial chains and economies of scale. China's complete steel, electronics, and machinery supply chains, along with industrial clusters in places like Jingjiang, significantly reduced costs and improved efficiency.
Technological Breakthroughs: From "Follower" to "Leader"
In the past, South Korea dominated the high-end ship type sector, particularly in LNG carriers, securing 94% of the global orders in 2018-2019. However, China rapidly narrowed the gap by introducing and domesticating GTT technology. In 2024, China's market share in LNG carriers reached 48%, just a step away from South Korea's 50%.
China's breakthrough in large cruise ships is also remarkable. The "Love Magic Shanghai" delivered in 2024 was China's first self-developed large cruise ship, involving 25 million components, with a technical complexity comparable to an aircraft carrier. This ship's success marks China's transition from "low-end manufacturing" to "high-end intelligent manufacturing."
The green ship sector is China's "killer锏." With the International Maritime Organization's (IMO) goal of achieving zero emissions in shipping by 2050, the proportion of green ship orders soared from 8.2% in 2016 to 41% in 2024. China secured over 70% of global green ship orders, covering LNG dual-fuel, methanol dual-fuel, ammonia fuel ships, and battery hybrid ships, achieving full coverage of mainstream ship types and new fuels. In contrast, South Korea's orders were concentrated in LNG dual-fuel ships, with a single variety.
China's technological breakthroughs are impressive: the world's first LNG-powered Very Large Crude Carrier (VLCC), the largest dual-fuel car carrier, and the largest 700-container pure electric-powered container ship all came from Chinese shipyards. These include the "Far Ruiyang" built by Dalian Shipbuilding Industry (DSIC) in 2022, the "Höegh Aurora" built by China Merchants Heavy Industry Jiangsu Shipyard in 2024, and the "Green Huashan" built by Jiangnan Shipyard in 2024.
World’s First LNG Dual-Fuel Very Large Crude Oil Tanker "Far Ruiyang"
China has also made progress in ammonia-powered ship research and development. These achievements highlight China's leadership in green technology and lay the groundwork for "overtaking on a curve" in other ship types.
China Model: Policy Support and Demand Driven
China's shipbuilding success is inseparable from a strong industrial chain and policy support.
China boasts the most complete shipbuilding supply chain globally, with everything from steel to core components readily available, reducing purchasing costs by 50% compared to Japan and South Korea. For instance, in Jingjiang, the local supporting rate exceeds 40%, with Yastar Anchor Chain dominating over 60% of the global ship anchor chain market. Small giants like Fuyuan Ship Accessories and Haihong Plastic Products further reduce costs and enhance efficiency. In 2024, CSSC invested 5 billion yuan to expand bases in Tianjin and Wuhan, Yangzi River Shipyard invested 3 billion yuan to expand its Jiangsu shipyard, and Hengli Group restarted the STX old factory in Dalian, Liaoning, planning to form large oil tanker and ultra-large container ship building capabilities by 2025.
Government policies have injected strong momentum into China's shipbuilding industry. Subsidies, tax incentives, and state-owned enterprise integration policies ensured efficient industry operations. In contrast, South Korea faces high labor costs, approximately twice that of China, and frequent labor disputes slow down production schedules. In 2023, South Korea increased the proportion of foreign workers from 20% to 30%, still struggling to relieve labor pressure. South Korea's "selective order-taking" strategy—focusing on high-value LNG and LPG transport ships—maintained profits in the short term but lost ground in mainstream markets like container ships. In 2021, China secured 55% of the container ship orders, while South Korea accounted for only 34%.
China's rise in shipbuilding also benefits from strong domestic demand and global trade needs. As the largest manufacturer and trader in the world, China generates massive shipping demands. In August 2023, China surpassed Greece to become the largest shipowner in the world, with a fleet size of 249.2 million gross tons valued at $180 billion. In comparison, South Korea's fleet size is only 60 million gross tons, providing limited domestic shipbuilding demand. China's manufacturing-export-shipping-shipbuilding industrial chain forms a closed loop, driving scale with scale, creating an unparalleled competitive advantage.
Korea's Shipbuilding Predicament: How Long Can Its Technical Edge Last?
South Korea was once renowned for its technological leadership and high quality, particularly excelling in liquefied natural gas (LNG) carriers, very large crude carriers (VLCC), and liquefied petroleum gas (LPG) carriers. In 2024, South Korea accounted for 93% of the LPG carrier market and secured 44 out of 62 global LNG carrier orders. However, facing China's comprehensive rise, South Korea's shipbuilding industry's shortcomings are increasingly exposed.
Firstly, market share continues to shrink. In 2024, South Korea's new order volume accounted for only 17% of the global total, further declining from 20% in 2023, reaching an eight-year low. China's order share expanded from 40 percentage points ahead in 2023 to 54 percentage points.
Secondly, cost and efficiency disadvantages are evident. Shipbuilding is a complex and comprehensive industry requiring high levels of capital, technology, and labor intensity. South Korea faces relatively scarce labor resources. Labor costs account for more than 20% of production costs in South Korea, while China is only half of that. South Korean shipyards have long delivery cycles, limiting production efficiency, whereas China, through intelligence and localized supply chains, shortened the VLCC construction time from one year to 180 days.
Moreover, South Korea's strategic misjudgments have exacerbated its decline. Focusing on high-end ship types led to losing ground in mainstream markets like container ships, significantly weakening its market competitiveness.
In the mid-2010s, the global shipping market entered an expansion phase due to a surge in container ship demand. However, South Korean shipyards, such as Hyundai Heavy Industries and Samsung Heavy Industries, prioritized profit margins over volume, deliberately reducing the acceptance of low-margin small and medium-sized container ships, instead focusing on high-value-added LNG carriers and very large crude carriers (VLCC). For example, in 2016, South Korean shipyards rejected multiple orders for 8,000-12,000 TEU container ships from smaller shipowners due to profit margins below 15%, far lower than the 30%+ return rates of LNG carriers.
Meanwhile, Chinese shipyards, such as Hudong-Zhonghua and Jiangsu Yangzi River Shipyard, actively accepted these orders, rapidly capturing the market through scaled production and cost advantages. Between 2018 and 2021, China's container ship order share jumped from 35% to 55%, while South Korea dropped to 34%. South Korea's shipyards' strategic choice maintained high profits in the short term but sacrificed the core demand area of the global shipping market—container ships—resulting in a significant decline in market competitiveness and providing critical opportunities for the rise of China's shipbuilding industry.
The South Korean government attempted to reverse its decline through the "K-Shipbuilding Hyper-Gap Vision 2040" plan, investing $1.44 billion in developing smart and green ship technologies. However, facing China's dual squeeze in scale and technology, whether South Korea can hold its last line of defense in high-end ship types remains uncertain.
The Geopolitical Ripple Effects of China's Shipbuilding Rise
China's rise in shipbuilding has reshaped the industrial landscape and triggered geopolitical tremors.
America is highly alert to this, launching a Section 301 investigation in March 2024, accusing China of dominating the shipbuilding industry through subsidies. In April 2025, the U.S. Trade Representative Office (USTR) released a report, determining that China's policies harmed American interests and threatened supply chain resilience.
The Trump administration proposed tariffs on Chinese ships to counter China by "rebuilding American shipbuilding." The Canadian Marine Industries and Shipbuilding Association (CMISA) also called for 100% tariffs on Chinese ships. However, China's ship exports to allies like Denmark, France, and Greece have already deeply influenced the global market.
China's "military-civil fusion" strategy is also viewed as a threat by the West. By 2024, China's naval fleet numbered 234 vessels, surpassing the United States' 219. It should be noted that protectionism offers no solution; America's shipbuilding problems stem from its long-term decline rather than competition from China.
China's rise in shipbuilding is the perfect combination of scale, technology, and national will. However, challenges remain.
Firstly, technical bottlenecks have yet to be fully overcome. Although China has made breakthroughs in LNG carriers and large cruise ships, there are still gaps with South Korea in core equipment and design capabilities.
The risk of overcapacity also needs attention. In 2024, China's shipbuilding backlog order volume was 208.72 million deadweight tons, equivalent to 4.3 years of completion volume (48.18 million deadweight tons per year), indicating near saturation. If global demand slows, rapid capacity expansion may lead to oversupply. Additionally, international trade protectionism may limit China's ship exports through tariffs and sanctions, increasing uncertainty.
Nevertheless,凭借绿色船舶技术的领先地位，凭借中国的综合优势——低成本、强供应链、政策支持和旺盛需求——在未来几年内，中国仍将稳居全球首位。
Experts predict that by 2035, global ships will achieve 100% greening, further solidifying China's dominant position in this field. In 14 years, China completed its transformation from follower to leader. In 2024, with 74.7% of the order volume, China officially declared the end of South Korea's hegemonic era. This is an industrial victory and a demonstration of the country's comprehensive national strength.
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