By Liu Jin
"Though the international shipbuilding market is in continuous adjustment and depression and China's shipbuilding industry is facing a severe situation, the development of the industry is maintained basically steady." The concern is allayed by Xin Guobin, undersecretary of Ministry of Industry and Information Technology of the People's Republic of China, at the Forum of Structure Adjustment, Transformation Promotion and Benefit Increase in Shipbuilding Industry on October 27. According to Xin Guobin, the international shares of China's completed and held shipbuilding orders have been maintained over 40 percent, standing in a leading position in the international market, China's position as a great shipbuilding power has been further solidified, China's industrial structure has been optimized in a continuous way and China's comprehensive competitiveness has been promoted despite an adverse situation since the "12th Five-Year Plan". Overall, China's shipbuilding industry has stood at a higher development level and possessed foundation and condition for further breakthrough and pioneering in making itself stronger.
Remarkable rise in overall level
The shipbuilding industry is a modern comprehensive industry and military-civil strategic industry in the supply of technical equipments for national economy and national defense construction and an important support for China to enforce strategies of making a powerful marine and manufacturing country. China's Party Central Committee and the State Council have always highlighted the development of shipbuilding industry and listed ocean engineering and equipment and hi-tech shipbuilding as one of the key development areas in Made-in-China 2025.
In recent years, China's shipbuilding industry has constantly increased scientific and technological innovation and China has joined the first echelon of ocean engineering and equipment building in the world. China rose to the second place in the international market of new orders in 2013; China's international market share was up to 35 percent in two consecutive years (2014-2015), ranked in the first place in the world. Economic aggregate in ship equipment industry has also risen greatly. Its sales revenue in 2015 was over twice of that in 2010. China's industrial concentration has been clearly enhanced. The shipbuilding completion in China's top ten shipbuilding enterprises in 2015 rose to 53 percent compared with 47 percent in 2011.
Focused on energy conservation, safety and environmental protection, China's mainstream ship type area has formed a batch of brand ship types in advanced technical and economic indicators, favored by the market. China's hi-tech ship development has made a breakthrough and a batch of hi-tech products including 170,000m2 grade LNG ship, 80,000m2 grade VLGC, etc. have been delivered. China's 20,000-container vessel has attained batch orders, 100,000t semi-submerged ship, polar vessel, 10,000-lorry roll-on/roll-off ship and other prospective ship types have made important progress in design and development.
According to Wu Qiang, General Manager of China State Shipbuilding Corporation (CSSC), CSSC has made an outstanding performance in development, design and ship type. Its power equipment in particular has reached over 80 percent in self-sufficiency. Moreover, it has constantly made recombination and integration. It has decreased its 14 shipyards, and the amount is less than half after recombination.
Severe international shipbuilding situation
The international shipbuilding market has embarked on sustainable adjustment and depression for a long time since the international financial crisis broke out. In as long as 8 years of adjustment, it has been constantly worsening overall, despite ups and downs during the period.
Major shipbuilding powers such as Japan and South Korea have got into trouble comprehensively except for European shipbuilding industry, which has raised its market share despite an adverse situation due to its advantages in luxury liner, etc. Global dynamic shipyards have decreased from over 900 to current 400, cutting over a half. In addition to some small- and medium-sized enterprises lacking of competitiveness have been eliminated, large key shipbuilding enterprises in the world have been deeply influenced. Meanwhile, lots of vessels have been delayed in delivery due to frequent delay and withdrawal of global orders. Some agencies predict that the rate of global actual delivery as scheduled from this January to September was lower than 60 percent. Substantial funds of shipyards have been occupied due to difficulties in ship delivery, resulting in extremely high pressure in cash flow and manufacturing resources of shipyards. Survival has become a common difficulty faced by global shipbuilding industry.
China's shipbuilding industry is inevitably facing a more severe situation than that in 2009 and increasingly greater downturn pressure in economic operation in the industry.
According to statistical data, national shipbuilding completion in January-September 2016 was 24.93 million deadweight ton, down 15.1 percent on a year-on-year basis; Till the end of September, China's held shipbuilding orders were 109 million deadweight ton, down 18.1 percent on a year-on-year basis; China's new shipbuilding orders were 18.52 million deadweight ton, up 2.0 percent compared with a year earlier.
The overall industry has been facing a clear pressure and even leaders among China's shipbuilding enterprises have started to complain one after another. "This year, orders of the company seriously fell and probably will fail to be delivered. As a central enterprise focused on shipbuilding and relevant equipment industry, CSSC has encountered a huge impact," said Wu Qiang. CSSC as a giant in the domestic industry has encountered a not ideal situation. According to Sun Bo, the General Manager, its previous target is to catch up with shipping powers of Japan and South Korea and later, it is expected to surpass. Unfortunately, it has encountered a crisis in the most vigorous momentum of development. China's shipping industry is now rising to a high level but still facing numerous problems.
Deepening reform and accelerating transformation
At present, key shipbuilding powers in the world in a plight, a new round of scientific and technological revolutions and industrial reforms, China's economic development and implementation of major strategies, etc. supply important opportunities and broad space for development of China's shipbuilding industry. In the long run, the development of international trade is bound to boost growth in market demand in shipbuilding industry. Particularly as new lanes are to be opened in succession and development of marine resources is to further evolve towards the deep sea in the future, ocean engineering equipment, particularly deepwater equipment market, is still favored. So long as China's shipbuilding industry is able to undergo current severe tests, it will accomplish a great lot.