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Industry Report

Industry reports, briefs issued by Samsung Economic Research Institute

Chinese Shipbuilders are Coming

Chinese Shipbuilders are Coming

LIM Young-Mo

July 23, 2007

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China’s shipbuilding industry has recently achieved rapid growth. From January to April 2007, Chinese shipbuilders received orders for 8.50 million CGT1, up 65% year-on-year surpassing Korean shipbuilders’ newly received orders for the first time. China has already surpassed Japan, once the world’s largest shipping power (now the third largest), in the total amount of new orders and backlog orders in 2006.

Increasing orders and production have boosted Chinese shipbuilders’ profile worldwide. China currently boasts 31 shipyards2 in the world’s top 100, the most of any country: Japan is second with 30, while Korea has 15. Chinese shipbuilders are also gradually increasing their profile in terms of individual ranking. Dalian Shipbuilding Industry Co., Ltd, which ranked 10th in the world in terms of backlog orders in 2005, jumped to the fifth overall position in March 2007.

Although China may hold an edge in the total amount of new orders, Korea’s shipbuilding industry still holds the top position in other key areas such as the amount of backlog orders and the number of ships built yearly. Korea previously surpassed Japan to become the number one producer of ships globally in the year 2000. However, Korean shipbuilders shouldn’t rest on their laurels as China’s burgeoning shipbuilding industry has increased total global market share by over 40 percentage points in the span of roughly six years, while also increasing its qualitative capabilities. Moreover, China will likely maintain strong growth momentum as the global demand for bulk carriers, its largest business area, is expected to remain brisk at least over the near term.


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