China’s dominance in global industries has been growing steadily over the years, and 2024 marks a new milestone for the country as it secures its position as a leader in the shipbuilding sector. With an already commanding 70% share in vital industries such as new energy vehicles, lithium-ion batteries, solar photovoltaics, and rare earth elements, China has now added shipbuilding to its list of areas where it holds a decisive edge over the competition.
Record-Breaking Shipbuilding Orders
According to data from British shipping services provider Clarksons, released on January 8, 2024, the global order volume for new ships reached an impressive 2,412 vessels, totaling 65.81 million CGT (compensated gross tonnage) in 2023. This marks a 34% increase over the previous year, setting a new record for the highest growth in the past 17 years. The total value of these new ship orders amounted to $204 billion, or roughly 1.5 trillion yuan—an industry valued at over one trillion yuan. For context, the telecommunications equipment industry, a major sector in its own right, is valued at only around $100 billion annually.
In 2023, Chinese shipyards received orders for 1,711 vessels, amounting to 46.45 million CGT—a 54% year-on-year increase. This accounts for a dominant 70% share of the global market. The total value of these orders exceeded $134 billion (close to 1 trillion yuan), surpassing the previous record set in 2007. This marks yet another key industry in which China has broken the 70% threshold, signaling just how formidable its competitive edge has become. What’s particularly remarkable is that, unlike many other sectors where price wars drive down profits, the average price of new ships is on the rise.
South Korea’s Struggles
In stark contrast, South Korean shipbuilders only secured 250 vessels in 2023, totaling 10.98 million CGT—a modest 9% increase. Their global market share dropped to just 17%, below the critical 20% threshold. The total value of these orders was approximately $36.2 billion, less than one-third of China’s total. Other countries, including Japan and various European nations, accounted for a combined 8.38 million CGT (451 vessels), or 13% of the market—essentially the remaining portion after China and South Korea.
The situation became even more dire for South Korea in December 2023. During that month, just 86 vessels (1.94 million CGT) were ordered globally, with China securing 67 vessels (1.66 million CGT), taking an astounding 86% market share. South Korea could only manage 3 vessels (70,000 CGT), a mere 4% market share, marking its worst performance in a decade. The fact that South Korea narrowly avoided a complete collapse highlights just how far behind they have fallen compared to China.
China’s Unshakable Lead in 2024
Clarkson’s report for 2024 further underscores China’s unassailable lead in the global shipbuilding market. By key categories, China now accounts for nearly 90% of global container ship orders by TEU, 46% of LNG carrier orders by cubic meter (just behind South Korea’s 53% in this segment), 75% of oil tanker orders by deadweight tonnage, 80% of bulk carrier orders by deadweight tonnage, and 85% of car carrier orders by car capacity. With ongoing orders for ultra-large LNG carriers, which are expected to surpass South Korea soon, China’s dominance looks set to grow even further.
U.S. Response: A New Trade War?
Currently, China holds 70% of the global new ship orders, compared to the U.S.’s paltry 0.2%. It’s no wonder that U.S. officials are starting to panic. On January 13, Reuters reported that the U.S. Trade Representative (USTR) had completed an investigation into China’s maritime, logistics, and shipbuilding sectors, initiating a Section 301 investigation under the Biden administration. There have even been talks of imposing tariffs or port fees on Chinese-made ships, aimed at undermining China’s shipbuilding exports. The goal seems clear: to make it more difficult for Chinese ships to dock at American ports, discouraging shipowners from purchasing Chinese-built vessels.
This move by the U.S. is certainly an aggressive one, but it’s also deeply ironic. The U.S. shipbuilding industry has long been on life support, surviving mostly through government-backed contracts for domestic river transport and military orders. Meanwhile, China continues to capture a massive 70% of the global market, and it’s unlikely that the U.S. will be able to derail China’s progress anytime soon. The combined efforts of the U.S., Japan, and South Korea may only account for around 25% of the global market share, with China firmly holding the lion’s share.
The Future of Global Shipbuilding
As China’s influence continues to expand across critical industries, the global balance of power is undeniably shifting. While the U.S. may attempt to stymie China’s rise, the reality is that China’s competitive advantage in shipbuilding is unlikely to be halted by such measures. The future of global trade and maritime logistics will likely see China at the helm, with its dominance in shipbuilding serving as just one more testament to its growing economic clout.
In the end, the question is not whether China will continue to lead, but how the world—and particularly the U.S.—will respond to this undeniable shift in global economic power.