Share of East Asia in shipbuilding can go up, as Vietnam, Philippines, Indonesia and Malaysia gather pace.
Chinese shipbuilding industry
- Thread starter tphuang
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Share of East Asia in shipbuilding can go up, as Vietnam, Philippines, Indonesia and Malaysia gather pace.
Look at what Peter Navarro just wrote. He is good in the awareness of the problems but completely lacks in the ability to come up with a proper solution. Equally ironic the US biggest shipping line, Foremost Group, is owned by a Chinese American who just happens to be Mitch McConnell's father in law and the father of the current US transportation secretary. Maybe Navarro needs to talk to him, as Foremost Group orders their ships from China, Korea and Japan.
Don't blame China. The sinking of the US shipbuilding industry began in the sixties and seventies, when Japan took the lead in the world shipbuilding stage. Japan, Europe, then South Korea used all forms of government and mercantilist policies to move their shipbuilding industries ahead, while the US shipbuilding industry decayed for various reasons, much of it internally. The US shipbuilding industry was long gone from world leadership by the time China entered the stage to become the world's leader in 2012.
Don't blame China. The sinking of the US shipbuilding industry began in the sixties and seventies, when Japan took the lead in the world shipbuilding stage. Japan, Europe, then South Korea used all forms of government and mercantilist policies to move their shipbuilding industries ahead, while the US shipbuilding industry decayed for various reasons, much of it internally. The US shipbuilding industry was long gone from world leadership by the time China entered the stage to become the world's leader in 2012.
by78
General
Why are you always trying to derail discussions?
Totally agree that the capacity of commercial ship building of a country would directly impact the capability of building military ships. Just look at the British empire, then Japan and now the US is nervous about China's shipbuilding capability.Korea's secret weapon: Massive shipyards
China's counter: Massive shipyards.
It truly is about the size of the shipyards.
Lets take this step after step.
A shipper wants lower freight costs and higher margins.
What can lower freight costs?
A bigger ship, because of scale. Smaller ships are less cost and fuel efficient than larger ships when shipping in volume.
So, ships keep getting bigger. And bigger. And Bigger. And BIGGER.
Japan, after the war, with her infrastructure destroyed, wants to put people back into work, had government initiated programs to rebuild her ship building industry. As years roll by, modern ships are getting bigger and bigger due to the need of scale.
Because Japan is starting with a clean slate and destroyed legacy infrastructure, the country is able to build huge shipyards that can build these huge modern ships. The UK and the US, on the other hand, are full of older shipyards that date back to well over a century, and suddenly these shipyards cannot build these huge modern ships that the top shipping companies demand. With that, these shipyards are gone. The ship building industry that help make the UK and US maritime empires and won two World Wars, evaporated with bankruptcies and closures, one by one by one, in the face of Japan's massive industrial combines behind these huge shipyards churning giant containerships and tankers.
An example of a Japanese made megaship.
When ships are reaching 300 meters, then 400 meters then pass that, you realize you need a huge dry dock to assemble the ship, and there is not a lot in the world. In the US, there are only two, one reserved for building aircraft carriers and the other for refitting them. That takes the US out of the market for building, and the same thing happened with the UK's traditional shipyards. No government support, no capital investment for massive new shipyards, and without new orders coming in, its becomes a Catch-22 with the lack of funding. These shipbuilding companies cannot afford to make such shipyards without huge government support, capital injections and a robust market that provides sustainable revenue. A lot of the capital Japan used to make her shipyards also comes from Zaibatsu (conglomerate) connections, such as Mitsubishi, Kawasaki, Mitsui, and Sumitomo, and these financial megastructures the US and the UK doesn't have. Finally, you have huge domestically owned shipping companies that can buy these ships, kick start and sustain the market supply and demand cycle, companies that are also connected on the conglomerate level, like Mitsui and KKK (Kawasaki Kisen Kaisha).
Japan, despite being the loser of the last World War, became the dominant shipbuilder in the world decades after it.
The Korean cycle came for these reasons:
Huge government and banking support for this sector.
Lots of spare land to build massive shipyards from scratch.
Korean Chaebols like Samsung, Hyundai and Daewoo match the Japanese Zaibatsu.
Relatively cheap labor, which has become an increasing problem with the Japanese.
Domestic shipping lines like Hanjin.
To make a long story short, have you heard about the phrase that if you build it a thousand times, you become a master? Build enough ships, and you become a master of it.
A few decades later, the Chinese cycle began.
Huge government and banking support for this sector.
Lots of spare land to build massive shipyards from scratch.
Chinese SOEs match the Korean Chaebols and Japanese Zaibatsu.
Plenty of cheap labor, coming at a time when Korean labor costs are rising up and Japan's sky high.
Domestic shipping carriers like COSCO.
And once again, if you build it a thousand times, you become a master.
This is where we are now.
Why the US and the UK fears, or what everyone in the EU fears as well is that if you don't practice the production of ships, your shipbuilding skills will atrophy. This is why the US shipbuilding has become a government sponsored industry building entirely out of naval contracts, and of the Jones Act. If you know the Jones Act, its a US law that was passed in the thirties that requires a ship that services one US port to another US port to be US made and American crewed. So if you are shipping from Rio De Janeiro to Houston, you can use a foreign ship. But if you ship from Houston to New York, it has to be a US made and crewed vessel.
One result of this, is that compared to the ships produced in C-J-K, the Jones Act ships are pretty small, not something you would think that Maersk or MSC would use.
At 3,500 TEU (3,500 20 foot containers), this has been the biggest so far among the Jones Act ships. Compare that to the fleets of 23,000 TEU container ships coming out from China and Korea and you can start to grasp where US commercial shipbuilding is now.