Due to the Chinese economy’s important role in the world economy and the huge demand in the shipping market, the big state-owned shipyards and major middle-sized shipyards are rapidly increasing their capacity, and many small, private yards are mushrooming.
Furthermore, today the words ‘ahead of schedule’ are very often heard in Chinese shipyards instead of ‘delay’. The main reasons for this are gradual improvements in management; the fact that yards build series vessels using an existing design instead of building different types of new-design vessels; and the fact that owners are encouraged by the hot market to accept delivery of ships with satisfactory quality earlier on.
However, today’s good unit contracts which are subject to productivity limitations need to be balanced by the large number of low-price contracts signed two years ago. Consequently, Chinese shipyards are still under financial pressure.
Looking ahead, the main challenges facing the Chinese shipbuilding industry are to increase its productivity more quickly than its labour costs; to develop high-level standard designs; and to set up and develop ancillary support.
When the market declines, some of the Chinese shipyards will have problems or difficulties, and may even close down altogether, but the elite will cope with the challenges and improve their management, quality and marketing and then manage their activities better.
The Chinese shipbuilding industry will in any case develop quickly and healthily, and it needs support and assistance. By supporting, cooperating with and assisting the Chinese shipbuilding industry, companies will benefit from the industry, from the Chinese shipping market and from the world shipping market, which is deeply influenced by the China factor.
Date: 2005-12-22