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UPDATED: August 19, 2013 NO. 34 AUGUST 22, 2013
Abandon Ship? Not So Fast
China is set to revitalize its beleaguered shipbuilding sector
By Lan Xinzhen

Forward and beyond

The 2009 support plan for the shipbuilding sector didn't help the sector escape the dilemma but instead exacerbated overcapacity. Can this new plan succeed in bringing changes?

Li Yanqing said the new plan has given powerful shipyards more incentive to upgrade. "In the future, China's shipbuilding industry will come up with more innovations in shipbuilding technology, develop more higher-end and green shipbuilding and expand overseas," he said.

Li Yanqing predicted changes in the sector in the next several years—for instance, outdated and excess capacity will gradually be phased out and investment will flow to higher-end fields. Even before the new plan was rolled out, most shipyards realized their high numbers were a disaster for the sector and began to upgrade.

One example is the China State Shipbuilding Corp., which has invested heavily in research and development and adjusting its product portfolio. The proportion of high-end vessel orders has increased tremendously, including large container ships, multi-functional ocean engineering ships and large LNG ships.

Li Yanqing said that under the new plan, capital and the markets will favor shipyards manufacturing higher value-added products.

"China State Shipbuilding Corp. has turned to high-end and green production. More and more Chinese yards will follow suit."

Major Tasks in the Plan

- Accelerate technology innovation and realize innovation-driven development;

- Improve production levels for key equipment and materials;

- Adjust and optimize the layout of vessel production;

- Facilitate the development of high-end products;

- Stabilize the industry's international market share;

- Urge more military-civilian cooperation in vessel design and development;

- Strengthen company management and services.

Shipbuilding H1 2013

The completed orders, new orders and total orders in Chinese shipyards accounted for 39.1 percent, 44.2 percent and 43.1 percent of the world total, respectively.

Chinese shipyards built 20.6 million deadweight tons of vessels, down 36 percent year on year. They received new orders for 22.9 deadweight tons of vessels.

Completed vessels for exports were 17.28 deadweight tons, down 34.4 percent, and new orders for vessel exports were 21.04 million deadweight tons, up 163.3 percent. At the end of June, total orders for vessel exports were 95.14 million deadweight tons, down 11.3 percent year on year. Completed orders, new orders and total orders for vessel exports accounted for 83.9 percent, 91.9 percent and 87.3 percent of the national total, respectively.

(Source: Chinese Association of the National Shipbuilding Industry)

Email us at: lanxinzhen@bjreview.com

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