No one could argue that Chinese shipbuilding has gone from strength to strength in the last few years. Its shipbuilding output has more than doubled in the last three years, and ships ordered from China during 2003 was twice that of those ordered in the previous year.

Indeed talk to the President of any shipyard in China from Dalian to Guangzhou and you will hear how China's shipbuilding capacity is expected to be comparable to that of Japan and Korea by 2015. Some even suggest that China will be supplying 50% of the entire world fleet by 2050. The Korean's are certainly concerned, but do they have reason to be?

On a two week tour visiting a number of yards, it became obvious that the state-owned shipyard groups CSSC and CSIC are investing heavily in their yards. CSSC has accelerated its shipyard development phase, which began in 1999 with the construction of the modern (by Chinese standards) SWS yard, and will follow in 2007 with the relocation of Shanghai's Jiangnan, and other CSSC-operated shipyards, to Changxing island.

CSIC, meanwhile, has big plans for its yards. The Mayor of the Dalian Municipal People's Government, Xia Deren, declared that the 'state government has made it clear it will build Dalian into a very important shipbuilding, manufacturing, petro-chemical, electronic and information technology base'. That's all in the not-too-distant future, but both shipyard groups admit that if the country is to succeed in specialist market sectors, such as LNGCs and FSPOs and become a dominating force in world shipbuilding, then yard development and expansion must go hand-in-hand with improvements in quality assurance, management systems, automation, and in particular, design software packages.

Only when these systems are in place will shipowners be confident enough to help meet China's potential.

Date: 2003-12-01