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In Europe, Some Segments of the Shipbuilding Industry Are Heavily Dependent on China. Europeans Also Fear the Lower Prices Charged by the Chinese
China reaps the rewards of billion-dollar investments in technology and industry over the past decades. Today, the Asian country has a massive share of the global maritime market. Knowing this, the German Shipbuilding and Ocean Industries Association (VSM) issued a statement alerting the German government and other European governments about the strong dependence on China.
The Association’s Criticism of China Has a Long History.
It is not new that the association warns about the prices China charges at its shipyards, gaining a huge advantage in the market over its competitors. The VSM also highlighted that the maritime scenario in Europe is dependent in the same way that Europe depends on gas from Russia.
The association made a rather grim forecast for the next 10 years in Europe. According to it, if there is no major change in the shipbuilding scenario on the continent, European countries will lose the capacity to build merchant ships of any scale. If this happens, the advantage of the Chinese will be even greater.
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China Offers More Competitive Prices
Even with record demand being observed in some segments of the shipbuilding market, China is managing to offer prices up to 30% lower than those charged 15 years ago. During this period, the average salary of the Chinese has increased by 400%.
Global demand for new ships has doubled; however, the orders for new ships made in Europe have fallen by 20%. Currently, European shipbuilding companies are heavily dependent on China.
Importance of China in Global Shipbuilding
China is the world’s largest builder of large ocean vessels. Its main shipyard is the China State Shipbuilding Corporation (CSSC), which controls about 21% of the global shipbuilding market.
According to a report from Al Jazeera, China gained this importance in the global market after Beijing merged its commercial and military shipyards. In this way, the People’s Republic has become a major rival to South Korea and Japan, two other giants in the field.
According to data from CSIS, between 2019 and 2021, the four shipyards controlled by CSSC received orders for at least 211 commercial ships, with foreign companies making 64% of the orders. China produces 96% of all containers and 80% of all cranes.
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