In the landscape of diverse industries today, which sector can be considered truly 'hot'? Some might point to new energy vehicles or humanoid robots, while many others would direct their attention to a significant traditional industry—shipbuilding. Indeed, Chinese shipbuilding has been on a remarkable run lately.
Examining the market data reveals comprehensive growth across three key metrics. In the first quarter of this year, China's ship completions, new orders, and order backlog increased by 46.0%, 195.2%, and 43.6% year-on-year respectively. Their respective shares of the global total reached 57.3%, 84.9%, and 69.8%, demonstrating a leading global position.
Looking at the products, new records are being set continuously. On April 26th, the country's first 180,000 cubic meter LNG (liquefied natural gas) carrier, the "Georgetown," was delivered. On May 15th, the first 24,000 TEU dual-fuel container ship built by a private shipyard commenced its maiden voyage. On May 27th, the second domestically built large cruise ship, the "Aida Huacheng," completed its sea trials and is scheduled for delivery in November.
What is driving this surge in Chinese shipbuilding? An investigation reveals the underlying factors.
Expanding Capabilities and Enhanced Quality
At the No. 2 dock of Nantong Cosco KHI Ship Engineering in Jiangsu, the third 24,000 TEU methanol dual-fuel container ship is undergoing final assembly. On June 25th, the lead ship of this seven-vessel series, the "Oriental Wisdom," was just delivered.
"The 'Oriental Wisdom' is equipped with the world's largest methanol dual-fuel main engine, auxiliary engines, and boiler. We spent three years on independent R&D to develop a solution that balances environmental protection, economy, and adaptability," said Li Yong, Deputy General Manager of Nantong Cosco KHI. He noted that the company's two docks are operating at full capacity, with orders scheduled through 2030.
From Dalian in Liaoning to Nantong in Jiangsu, Shanghai, and Guangzhou in Guangdong, many major shipbuilding bases are currently operating at full capacity, with leading enterprises generally having order books filled until 2030. This robust production and sales environment is closely tied to sustained growth in market demand.
The shipbuilding industry is characterized by strong cyclicality. At the beginning of the new century, Chinese shipbuilding entered an upward cycle lasting about a decade. Around 2010, impacted by the international financial crisis, existing orders were gradually fulfilled, and the entire industry entered a downturn. From 2016 to 2018, some shipyards experienced idle docks.
"Since 2021, the global new shipbuilding market has experienced a sustained growth period of about five years. With major shipbuilding nations having saturated order books, Chinese enterprises seized the opportunity to further consolidate their leading position," said Zheng Yiming, Assistant Secretary-General of the China Association of the National Shipbuilding Industry.
From an international market perspective, multiple factors support the return of high market activity: the increasing average age of the global fleet is driving demand for commercial vessel renewal; the International Maritime Organization's vision to achieve net-zero greenhouse gas emissions from international shipping around 2050 is creating a need for a large-scale fleet renewal; orders for bulk carriers and container ships have grown significantly post-pandemic; and demand for LNG carriers and tankers has also increased due to geopolitical conflicts.
Fluctuations in demand and market conditions are inherent to the market. The ability to seize opportunities and ride the wave is underpinned by the solid, hardcore capabilities of "Chinese ships."
Holding nearly 60 pending orders for LNG carriers, ranking first globally by total cargo capacity, with a product portfolio covering all conventional large and very large LNG carrier types—these orders reflect the position of China State Shipbuilding Corporation's Hudong-Zhonghua Shipbuilding in the LNG carrier sector. From initially introducing and assimilating technology to now leading in multiple technologies globally, Hudong-Zhonghua has successfully joined the top tier in this specialized field, having compressed the construction cycle record for a 174,000 cubic meter LNG carrier to 16 months.
The list of vessels China cannot build is shrinking, while the quality of what it can build is constantly improving. From very large LNG carriers to polar icebreaking research vessels, from domestically built aircraft carriers to large cruise ships, China now possesses total assembly and construction capabilities across the entire spectrum of marine products. This foundation enables it to capitalize on opportunities presented by the global shipping industry's green transformation and the new upward cycle in the new shipbuilding market.
More High-End Products and Higher Construction Efficiency
Visiting shipbuilding facilities firsthand, one can clearly sense that incremental progress across the entire industry over the years has coalesced into a "collective leap forward," propelling Chinese ships to sail further.
— Accelerated R&D is yielding more high-end products. At the Lvsi Port in Qidong, Nantong, the newly invested offshore equipment base of Wison Clean Energy Technology Group is in trial production. Since its founding in 2004, this private enterprise has focused on offshore engineering, continuously moving its business towards higher-end and more specialized directions. It now primarily focuses on FLNG (Floating Liquefied Natural Gas production, storage, and offloading units) and floating production, storage, and offloading facilities.
"By overcoming challenges in liquefaction process application and ultra-low temperature storage tank technology, we successfully secured China's first large-scale FLNG project undertaken as a total package by a domestic enterprise, breaking the monopoly of foreign shipbuilders," said Li Linwei, Assistant General Manager of the Wison Qidong Offshore Equipment Base.
There is broader space for pioneering innovation. Chinese shipbuilding enterprises are delving deep into areas like green and low-carbon technology application and high-end vessel R&D, successively delivering a series of new equipment that is high-end, intelligent, and green. Vessels such as dual-fuel passenger ro-ro ships, large LNG dual-fuel car carriers, and very large ethane carriers have already achieved batch deliveries. In special marine equipment, large deep-sea aquaculture vessels, rocket recovery ships, and deep-sea green intelligent technology test vessels have also been delivered.
— Smart manufacturing is enhancing construction efficiency. With robotic automatic sorting, AGVs shuttling back and forth, work order-driven crane automatic feeding, and intelligent scheduling and automatic production planning for cutting machines... at the laser welding thin plate production line of the China Merchants Shipbuilding Haimen Base in Jiangsu, steel plates are automatically processed into various shipbuilding thin plates. Local deformation is controlled within ±2 millimeters, and the block fabrication cycle is compressed by 50% compared to traditional workshops.
For shipbuilding enterprises, shorter delivery cycles and lower labor costs are key competitive factors. In recent years, leading shipbuilders have actively introduced equipment like robotic plate/bar cutting production lines, intelligent painting lines, digital welding machines, and flexible manufacturing intelligent welding robots. Improvements in specific segments have driven efficiency gains across the entire chain, effectively compressing delivery cycles and costs.
— An increasingly robust supply chain strengthens comprehensive capabilities. Marine engines are the "super hearts" of ten-thousand-ton giants. With a single-cylinder power of 1150 kW and a total power of 9200 kW, achieving a localization rate of 95%... the 8-cylinder 450DF dual-fuel diesel engine developed by CSSC Power (Zhenjiang) Co., Ltd. has been delivered, filling a domestic technological gap in high-power medium-speed engines.
Ultra-low temperature valves capable of withstanding minus 163 degrees Celsius are called the "heart valves" of large LNG carriers. In May this year, the "Princess of Johor," built by Hudong-Zhonghua Shipbuilding, became China's first LNG carrier to achieve full-spectrum assembly of domestically produced ultra-low temperature valves in its cargo tank core system.
Shipbuilding is a "giant systems engineering" project with numerous components, a long industrial chain, and strong radiating and driving effects. In recent years, collaborative efforts between whole-machine and component manufacturers, equipment suppliers, and end-users have led to breakthroughs in domestically produced marine main engines, boilers, cranes, and gas supply systems, further enhancing the systemic advantages of Chinese ships.
Securing the Present and Seizing the Future
Strong demand leads to ample orders; a stable RMB exchange rate benefits foreign trade exports; low steel prices increase profit margins—in the view of Li Yanqing, Vice President and Secretary-General of the China Association of the National Shipbuilding Industry, the industry's positive momentum is supported by multiple favorable factors in the short term. "For the highly cyclical shipbuilding industry, how to forge stronger capabilities and successfully navigate through cycles is a more critical question to consider."
On one hand, it's essential to secure the present, ensuring "guaranteed delivery, fast delivery, and good delivery." With order backlogs remaining high and new orders continuously flowing in, many enterprises face heavy production tasks. Li Yanqing stated that shipbuilding enterprises must, while ensuring safety, manage their industrial and supply chains effectively, using market-based methods to mitigate the impact of material cost fluctuations. Simultaneously, they should accelerate intelligent transformation, digitalization, and networking, promote the application of intelligent robots and automated production lines, continuously improve production and management efficiency, and ensure stable order delivery.
On the other hand, it's crucial to seize the future by striving to cultivate new growth drivers. Technologically, this involves promoting the empowerment of shipbuilding by artificial intelligence to enhance independent innovation capabilities. On a panoramic screen displaying simulated scenes of maritime navigation, with frequent scenarios of vessels meeting, overtaking, and crossing, this is an intelligent ship piloting experiment conducted by China Merchants Industry Intelligent Technology Company. Through the fusion of "radar + electronic chart + vision," the laboratory can validate functions such as intelligent ship perception, autonomous collision avoidance, and autonomous route planning, laying the groundwork for real-ship applications.
"After the application of the intelligent navigation system, it can both reduce the crew's workload and ensure navigation safety," said Tan Zhurong, Deputy General Manager of the company. In his view, artificial intelligence is profoundly impacting all industries, and shipbuilding enterprises must actively embrace cutting-edge technologies.
In terms of business models, it involves innovating concepts, optimizing services, and intensifying international operations. In the offshore industry, the launch of a project often signifies the end of an EPC (Engineering, Procurement, Construction) contract. However, for HanChen Elite Marine Engineering (Jiangsu) Co., Ltd. located in the Nantong Innovation Zone, it marks a new beginning. By the end of 2025, the company won a bid for a Floating Production Storage and Offloading (FPSO) vessel project for Malaysia's national oil company, with the contract spanning 15 years—covering the entire process from design, procurement, construction, installation, commissioning, leasing, to operation and maintenance. This project marks the first use of China-made "Taihang 7" gas turbines and centrifugal compressors on an FPSO, allowing Chinese high-end equipment to "sail out" alongside engineering services.
"The future competition in shipbuilding will essentially be a competition of service systems," said Lin Chen, Director of the Talent, Technology, and Investment Bureau of the Nantong Innovation Zone. The zone has already gathered over 30 service enterprises related to shipbuilding, forming an industrial chain ranging from ship design and engineering procurement to AI empowerment and specialized supporting services.
The China Association of the National Shipbuilding Industry stated that shipbuilding enterprises should intensify their international operations, accelerate the construction of global marketing and service networks, promote the establishment of overseas R&D centers, and enhance their capabilities in exploring international markets.
With technological breakthroughs, new ship deliveries, and continuous new orders, the miracle of Chinese shipbuilding continues to unfold. By leveraging existing strengths to extend advantages and tackling challenges to address weaknesses, Chinese ships, already leading the world, are set to sail towards even broader waters.