Nearly two years after the financial crisis, China's shipbuilding industry has yet to set sail again.

Chinese shipbuilders received new orders of only 159,000 deadweight tons in January 2010, barely 10 percent of that of South Korea, according to London-based Clarkson ship brokers. Meanwhile, many owners are seeking to postpone deliveries or cancel them outright since they have no cargo to ship.

A lack of financing that helps keep shipbuilding afloat has only added to the industry's woes. The deep downturn means yards are taking in few down payments on new orders that were typically used to finance ship construction.

South Korean competitors have taken this opportunity to grab market shares by depressing prices, said Wang Jinlian, Secretary General of the China Association of the National Shipbuilding Industry.

Of course, the competition will also be a powerful catalyst for Chinese shipbuilders to strengthen efficiency and sharpen their competitive edge, he added.

China overtook South Korea as the world's biggest shipbuilder in the first half of 2007 by winning more orders in terms of deadweight tonnage, but South Korea remained far ahead in manufacturing high-end products, like LNG (liquefied natural gas) ships.

Liang Zhiyong, a senior analyst with the China Shipbuilding Industry Economy Research Center, also struck a note of caution. "Darker days may lie ahead for the industry given the chronic overcapacity problem and the deteriorating global trade," he said.

The past few years have seen a number of small private yards spring up across the country, building excess capacity that would take years to absorb.