U.S. Shipbuilding Industry Struggles to Compete with China's Dominance

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U.S. Shipbuilding Industry Struggles to Compete with China's Dominance

U.S. Shipbuilding Industry Struggles as China Dominates, Highlighting Strategic Vulnerabilities
Titanic

Feb. 12 2024
article-main-img

Key Takeaway​

  • China's shipbuilding industry, accounting for over half of global output, starkly contrasts with the U.S.'s dwindling presence and capacity.
  • The strategic gap between Chinese and American shipbuilding capabilities poses significant challenges for U.S. military preparedness and global power projection.
  • Addressing the multifaceted challenges facing the U.S. shipbuilding industry is crucial to maintaining American maritime power and strategic interests globally.
U.S. Shipbuilding Industry Faces Daunting Challenges
The U.S. shipbuilding industry is currently navigating through troubled waters, overshadowed by the burgeoning prowess of China's shipyards. As the global dynamics of maritime power shift, the American shipbuilding sector finds itself grappling with a series of internal and external challenges that could potentially undermine its future competitiveness and strategic capabilities.

China's Dominance Grows
China's shipbuilding industry has achieved a remarkable feat, accounting for more than half of the world's commercial shipbuilding output last year. This stark contrast highlights the diminishing influence of Western shipyards, which once played pivotal roles in global trade and warfare. The U.S., in particular, has seen its shipbuilding capacity dwindle to a negligible presence on the global stage, overshadowed by the massive output from Chinese, South Korean, and Japanese shipyards.

Thomas Shugart, an adjunct senior fellow at the Center for a New American Security, expressed astonishment at the scale of China's shipbuilding industry, emphasizing the significant gap between Chinese and American capabilities. "The degree to which it dwarfs American shipbuilding is just unbelievable," Shugart noted, underscoring the strategic and operational challenges facing the U.S. maritime industry.

Strategic Implications for the U.S.
The strategic implications of China's shipbuilding dominance are profound, especially in the context of military preparedness and global power projection. Chinese shipyards, capable of producing both commercial vessels and warships, have become central to Beijing's ambitions of expanding its maritime power and influence. In contrast, the U.S. shipbuilding industry struggles with a range of issues, including backlogs, worker shortages, and a limited number of suppliers, which hamper its ability to meet even peacetime demands.

Rear Adm. Thomas J. Anderson highlighted the stark difference in shipbuilding capacity between the two nations, pointing out that China's commercial shipbuilding industry provides it with a "massive advantage." This advantage could prove decisive in a protracted conflict, where the ability to quickly replace lost ships and repair damaged ones is crucial.

Challenges Ahead for the U.S.
The U.S. shipbuilding industry's challenges are multifaceted, ranging from a lack of trained labor and dry dock shortages to the reliance on a dwindling number of vendors for critical components. These issues are particularly concerning in light of recent conflicts, which have demonstrated the importance of a robust and responsive industrial base for sustained military operations. The U.S. Navy's difficulties in maintaining and expanding its fleet further underscore the strategic vulnerabilities arising from the current state of American shipbuilding.
 

More than half of the world’s commercial shipbuilding output came from China last year​


Eamonn Sheridan
Wednesday, 14/02/2024 | 09:50 GMT+8

This is not breaking news, but an interesting item in the Wall Street Journal highlighting that despite all of China's economic woes it remains a massive global industrial power.

  • More than half of the world’s commercial shipbuilding output came from China last year—making it the top global shipmaker by a wide margin.
  • The once-prolific shipyards of the West that helped forge empires, expand trade and win wars have shriveled. Europe accounts for just 5% of the world’s output, while the U.S. contributes next to nothing.
  • Most of what China doesn’t build comes from South Korea and Japan.
The Journal piece (gated) goes on:

  • China’s military planners have leveraged all that to build up the world’s largest navy, in hull count—a force central to Xi’s greatest ambitions of projecting power overseas, protecting the sea lanes that connect China to the world and absorbing Taiwan.
  • America’s once-robust shipbuilding industry has shrunk. It no longer produces any significant number of commercial oceangoing ships. Several shipyards have only one big customer, the Navy, and those shipyards are often battling backlogs, worker shortages, a paucity of suppliers and cost overruns.
china%20shipbuilding%2014%20February%202024_id_3c1a78e0-6e38-464e-a6ee-a9003735fa7d_size775.jpg


 

China’s Titanic Shipbuilding Capacity

chinese-navy-3.jpg
The Chinese People's Liberation Army Navy guided-missile frigate Yueyang takes part in a China-Thailand joint naval exercise in waters off the southern port city of Shanwei, Guangdong Province, China, May 6, 2019.(Stringer/Reuters)

By LUTHER RAY ABEL
About Luther Ray Abel
February 13, 2024 9:52 PM

The Wall Street Journal has a report detailing China’s advantages in shipbuilding and the scale of the country’s maritime-infrastructure operations. For those concerned about a CCP that is turning more bellicose by the year, the development of China as the world’s majority shipbuilder using foreign orders to build out its navy-support facilities is worrisome, to say the least.

More than half of the world’s commercial shipbuilding output came from China last year—making it the top global shipmaker by a wide margin. The once-prolific shipyards of the West that helped forge empires, expand trade and win wars have shriveled. Europe accounts for just 5% of the world’s output, while the U.S. contributes next to nothing. Most of what China doesn’t build comes from South Korea and Japan.

“The scale [of China’s shipbuilding] is just almost hard to fathom,” said Thomas Shugart, an adjunct senior fellow at the Center for a New American Security whose research focuses on maritime competition. “The degree to which it dwarfs American shipbuilding is just unbelievable.”

This shipbuilding empire is a symbol of China’s historic transformation from an inward-looking continental nation to a maritime power. But it is more than that. It is a pivotal strategic asset for Beijing as Chinese leader Xi Jinping tries to reshape the world order in peacetime and prepares to prevail over his nation’s rivals during war.

Giant Chinese shipbuilding firms that crank out merchant ships for the world are often the same ones building warships for China’s navy. Their shipyards are thriving, with billion-dollar contracts pouring in not just for warfighting gray hulls but also for containerships, oil tankers and bulk carriers for shipping lines from China, the West and even Taiwan.

To come close to matching this buildup, Jerry Hendrix suggested recently in the pages of National Review that American conservatives and the federal government would have to get more comfortable with a nonmarket solution: monopsony.

Hendrix concluded:

There is no magic market force, no invisible hand from either Adam Smith or Dwight Eisenhower, that will reignite the defense-industrial base. To repeat, this sector of our economy is a monopsony in which the government is the only customer. Even those who are skeptical of industrial policy in general — most conservatives among them — should be able to recognize that defense manufacturing is different. We find ourselves today facing a significant probability of global military cataclysm, and we are not ready. We need a strong and unassailable military-industrial capacity to deter war; if deterrence fails, we will need that same capacity to avoid disaster and survive as a great power. We need ships. We need aircraft. We need missiles. But more fundamentally, we need to be able to build them in much larger numbers.

 
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China's Shipbuilding Dominance: A Maritime Powerhouse Rises

China has become the world's leading shipbuilder, accounting for over 50% of global commercial output in 2022. Its shipbuilding capabilities extend to both commercial and naval vessels, blurring the lines between civilian and military sectors.


Aqsa Younas Rana
13 Feb 2024 14:49 EST

In a staggering display of industrial prowess, China has taken the helm as the world's leading shipbuilder, contributing to more than half of the global commercial shipbuilding output in 2022. This achievement follows the nation's ascent as the world's factory floor, further solidifying its position on the global stage.

From Humble Beginnings to Global Dominance​

The transformation of China's shipbuilding industry over the past two decades has been nothing short of remarkable. In 2002, the nation accounted for a mere 8% of the world's total shipbuilding output. By 2012, that number had quadrupled, and by 2023, China's shipbuilding juggernaut had reached an unprecedented 51%. This rapid growth is a testament to the nation's commitment to modernization and its relentless pursuit of maritime dominance.

Thomas Shugart, adjunct senior fellow on maritime competition at the Center for a New American Security, aptly captured the scale of this achievement: "The degree to which it dwarfs American shipbuilding is just unbelievable."

Blurring the Lines Between Commerce and Defense​

China's shipbuilding capabilities extend far beyond commercial vessels. The nation's shipyards frequently construct both naval and commercial vessels, blurring the lines between civilian and military endeavors. This dual-purpose approach has enabled China to make significant strides in both economic and military spheres.

Matthew Funaiole, a senior fellow of the China Power Project at CSIS, explained this phenomenon: "Where we used to see some levels of division between the commercial side of things and the military side of things, those lines have just become increasingly blurred."

The China State Shipbuilding Corporation: A Maritime Powerhouse​

At the heart of China's shipbuilding empire lies the China State Shipbuilding Corporation (CSSC), which owns several subsidiaries that operate massive shipyards. These shipyards construct Chinese commercial and naval vessels, as well as foreign contracted vessels. Nations such as France and Taiwan have entered multi-billion dollar contracts with the CSSC to build oil tankers, shipping container vessels, and more.

Rear Adm. Thomas J. Anderson summed up the advantages of this commercial shipbuilding workload during a congressional hearing in May 2023: "Clearly, China's commercial shipbuilding industry provides them a massive advantage when it comes to shipbuilding capacity."

Satellite imagery reviewed by CSIS reveals booming shipyards on the island of Changxing, which is rapidly becoming a mammoth "shipbuilding base."

A Tale of Two Shipbuilding Nations​


In contrast to China's success, the U.S. shipbuilding industry has faced significant challenges in recent years. Unlike China, the U.S. produces a relatively small number of commercial vessels, and many shipyards have only one contract at a time, often with the U.S. Navy.

Maintenance delays, worker shortages, and component scarcity have resulted in a massive backlog of vessel production and repairs.

The size of the U.S. Navy has stalled, with the current fleet of 292 vessels likely to remain the same or even decrease. Meanwhile, China's naval fleet of 370 vessels is expected to grow to approximately 435 by 2030, with many warships boasting state-of-the-art wartime and technical capabilities.

In the event of a potential conflict, such as an invasion of Taiwan, China's expedited shipmaking abilities and proximity to the island could give it a significant advantage. The U.S. Navy maintains its edge in terms of quality, but China's sheer quantity could tip the scales in its favor.

As the world watches this maritime chess match unfold, one thing is certain: China's shipbuilding dominance has forever altered the global landscape.

 

China's Shipbuilding Dominance: A Maritime Powerhouse Rises

China has become the world's leading shipbuilder, accounting for over 50% of global commercial output in 2022. Its shipbuilding capabilities extend to both commercial and naval vessels, blurring the lines between civilian and military sectors.


Aqsa Younas Rana
13 Feb 2024 14:49 EST

In a staggering display of industrial prowess, China has taken the helm as the world's leading shipbuilder, contributing to more than half of the global commercial shipbuilding output in 2022. This achievement follows the nation's ascent as the world's factory floor, further solidifying its position on the global stage.

From Humble Beginnings to Global Dominance​

The transformation of China's shipbuilding industry over the past two decades has been nothing short of remarkable. In 2002, the nation accounted for a mere 8% of the world's total shipbuilding output. By 2012, that number had quadrupled, and by 2023, China's shipbuilding juggernaut had reached an unprecedented 51%. This rapid growth is a testament to the nation's commitment to modernization and its relentless pursuit of maritime dominance.

Thomas Shugart, adjunct senior fellow on maritime competition at the Center for a New American Security, aptly captured the scale of this achievement: "The degree to which it dwarfs American shipbuilding is just unbelievable."

Blurring the Lines Between Commerce and Defense​

China's shipbuilding capabilities extend far beyond commercial vessels. The nation's shipyards frequently construct both naval and commercial vessels, blurring the lines between civilian and military endeavors. This dual-purpose approach has enabled China to make significant strides in both economic and military spheres.

Matthew Funaiole, a senior fellow of the China Power Project at CSIS, explained this phenomenon: "Where we used to see some levels of division between the commercial side of things and the military side of things, those lines have just become increasingly blurred."

The China State Shipbuilding Corporation: A Maritime Powerhouse​

At the heart of China's shipbuilding empire lies the China State Shipbuilding Corporation (CSSC), which owns several subsidiaries that operate massive shipyards. These shipyards construct Chinese commercial and naval vessels, as well as foreign contracted vessels. Nations such as France and Taiwan have entered multi-billion dollar contracts with the CSSC to build oil tankers, shipping container vessels, and more.

Rear Adm. Thomas J. Anderson summed up the advantages of this commercial shipbuilding workload during a congressional hearing in May 2023: "Clearly, China's commercial shipbuilding industry provides them a massive advantage when it comes to shipbuilding capacity."

Satellite imagery reviewed by CSIS reveals booming shipyards on the island of Changxing, which is rapidly becoming a mammoth "shipbuilding base."

A Tale of Two Shipbuilding Nations​


In contrast to China's success, the U.S. shipbuilding industry has faced significant challenges in recent years. Unlike China, the U.S. produces a relatively small number of commercial vessels, and many shipyards have only one contract at a time, often with the U.S. Navy.

Maintenance delays, worker shortages, and component scarcity have resulted in a massive backlog of vessel production and repairs.

The size of the U.S. Navy has stalled, with the current fleet of 292 vessels likely to remain the same or even decrease. Meanwhile, China's naval fleet of 370 vessels is expected to grow to approximately 435 by 2030, with many warships boasting state-of-the-art wartime and technical capabilities.

In the event of a potential conflict, such as an invasion of Taiwan, China's expedited shipmaking abilities and proximity to the island could give it a significant advantage. The U.S. Navy maintains its edge in terms of quality, but China's sheer quantity could tip the scales in its favor.

As the world watches this maritime chess match unfold, one thing is certain: China's shipbuilding dominance has forever altered the global landscape.


WEST 2024 — Chief of Naval Operations Adm. Lisa Franchetti today said “it’s not about numbers” when asked about China’s shipbuilding capacity relative to the United States, a preview of the service’s likely talking points later this year when the newly installed CNO faces tough budget questions on Capitol Hill.

“I look at our Navy as part of a broader warfighting ecosystem. It’s not about numbers. It’s about how you put it all together,” Franchetti told an audience during the opening keynote speech for West 2024 here in San Diego. “It’s platforms on, under and above the sea. It’s the networks that enable them. It’s cyber. It’s our work in space. It’s work with all the joint force.”

“If you look at some of the things that all of our sister services are doing to get after this challenge of China, and you put all that pieces together, we are the dominant combat warfighting force,” she said.

 
WEST 2024 — Chief of Naval Operations Adm. Lisa Franchetti today said “it’s not about numbers” when asked about China’s shipbuilding capacity relative to the United States, a preview of the service’s likely talking points later this year when the newly installed CNO faces tough budget questions on Capitol Hill.

“I look at our Navy as part of a broader warfighting ecosystem. It’s not about numbers. It’s about how you put it all together,” Franchetti told an audience during the opening keynote speech for West 2024 here in San Diego. “It’s platforms on, under and above the sea. It’s the networks that enable them. It’s cyber. It’s our work in space. It’s work with all the joint force.”

“If you look at some of the things that all of our sister services are doing to get after this challenge of China, and you put all that pieces together, we are the dominant combat warfighting force,” she said.

When you are phasing out of a whole industry, you gradually lose the knowhow and technology in that industry, along with the large skill workforce, this is irreversable.
 

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