Chinese shipbuilders, who have been taking rapid strides on the global market, are emerging as rivals for the world’s leading shipyards in Korea and Japan. Chinese dockyards received record orders during the first five months of this year, including oil tankers, and container and bulk carriers. According to Lloyds, China grabbed 12.6 percent of the global shipbuilding market last year, up from 11.3 percent in 2001, 5.6 percent in 2000 and 2.5 percent in 1998. Construction by Chinese shipbuilders has so far been limited to low-value-added oil tankers and bulk carriers. But Chinese firms have started to make inroads to the higher value-added ship sectors like liquefied natural gas (LNG) carriers.

Chinese shipyards are reportedly busy upgrading their infrastructure in a bid to improve design, technology, productivity and delivery. At this stage, Korean and Japanese shipyards are ahead of their Chinese counterparts in technology and production capacity, but they are afraid that China will chip away at their market share in the future. China is estimated to be seven to eight years behind Korea in shipbuilding technology for LNG carriers and an average five years for other ship types. Fearing China’s rapid emergence as a global shipbuilding powerhouse, Korea’s big three shipbuilders - Hyundai Heavy Industries, Daewoo Shipbuilding and Marine Engineering and Samsung Heavy Industries, have been reluctant to form partnerships with Chinese shipyards for technology transfer.