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Assessing the cost competitiveness of China's shipbuilding industry

Abstract

Cost has a significant impact on shipbuilding competitiveness. In China, low costs have created favourable conditions for domestic shipyards competing in the international market. However, China's shipbuilders have faced rising cost pressures in recent years, which may affect their industrial competitiveness. In this article, we assess shipbuilding costs and their impacts on the competitiveness of China's shipbuilding industry. We compare developments with China's two primary competitors, South Korea and Japan, from 2000 to 2009. First, we analyse primary factors that affect shipbuilding costs. Second, we examine how the shipbuilding costs in China have changed over time. Finally, we use shipbuilding costs and market share to evaluate the competitiveness of China's shipbuilding industry. The results reveal sources and constraints of China's cost advantage, as well as changes in its shipbuilding costs and competitiveness. This article has broad implications for shipbuilding bids, ship production and policy-making.

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Acknowledgements

This research has been partially supported by the Chinese Scholarship Council and the TORM Foundation. The article was first presented at the ECONSHIP 2011 conference, June 2011, Chios, Greece, but the calculations have since been updated.

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Appendices

Appendix A

Table A1

Table A1 Average industrial wage and shipbuilding productivitya

Appendix B

Tables B1, B2, B3

Table B1 Conversion factors in relation to GT and LWTa
Table B2 Conversion factors in relation to LWT and CGT
Table B3 Shares of delivery by ship type and weighted conversion factors CGT/LWTa

Appendix C

Table C1

Table C1 Shipbuilding cost components and market share of shipbuilding delivery

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Jiang, L., Strandenes, S. Assessing the cost competitiveness of China's shipbuilding industry. Marit Econ Logist 14, 480–497 (2012). https://doi.org/10.1057/mel.2012.17

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Keywords

  • shipbuilding costs
  • industrial competitiveness
  • China's shipbuilding industry