China has become the leading force in shipbuilding over the past two decades, claiming over half of the global commercial shipbuilding market while the U.S. only holds a minuscule 0.1% share. This poses significant economic and national security challenges for the U.S. and its allies, as highlighted in a recent report from the Center for Strategic and International Studies.
In 2024, a single Chinese shipbuilder produced more commercial vessels by tonnage than the entire U.S. shipbuilding industry has since World War II. Additionally, China boasts the world’s largest naval fleet, according to the report.
The diminishing shipbuilding capabilities of the U.S. and its allies are deemed a pressing threat to military readiness, economic prospects, and China’s global power aspirations. Concerns about the state of U.S. shipbuilding have escalated in light of China’s mounting dominance and ambition to reshape the global order.
President Donald Trump has pledged to revitalize American shipbuilding for both commercial and military purposes. He announced plans to establish a new office of shipbuilding in the White House to facilitate this initiative.
The report underscores the dramatic evolution of China’s shipbuilding sector, particularly through the state-owned enterprise, China State Shipbuilding Corporation (CSSC). CSSC has strategically leveraged Beijing’s “military-civil fusion” strategy to blur the lines between defense and commercial activities, selling a significant portion of its commercial production to foreign entities, including U.S. allies.
To address the challenge posed by China, the report recommends that the U.S. invest in rebuilding its own shipbuilding capabilities and adopt strategies to compete effectively in the global market.
The recommendation is to bolster its shipbuilding industry and collaborate with partners to enhance shipbuilding capacities beyond China. In the short term, suggested measures include implementing strategies to create a fair competition environment and disrupting China’s ambiguous dual-use practices. This can be achieved by imposing docking fees on vessels made in China and severing financial and business connections between the US and CSSC and its affiliated companies. The Trump administration has introduced proposals for additional fees on vessels associated with China that visit US ports. Additionally, a consortium led by BlackRock recently reached an agreement to purchase ownership interests in 43 ports worldwide, including two ports adjacent to the Panama Canal, from a conglomerate based in Hong Kong.
