In just twenty years, China has emerged as the dominant force in shipbuilding, capturing over half of the global commercial shipbuilding market while the U.S. share has dwindled to a mere 0.1%. This shift presents significant economic and national security challenges for the U.S. and its allies, as highlighted in a report released on Tuesday by the Center for Strategic and International Studies.
In 2024, a single Chinese shipbuilder constructed more commercial vessels by tonnage than the entire U.S. shipbuilding industry has since World War II. The report also pointed out that China now boasts the world’s largest naval fleet. The erosion of U.S. and allied shipbuilding capabilities is deemed a pressing threat to military readiness, economic opportunities, and China’s global power projection, according to the bipartisan think tank.
Concerns over the declining state of U.S. shipbuilding have escalated as China’s influence grows, given its status as the world’s second-largest economy with ambitions to reshape the global order. At a congressional hearing in December, senior officials and lawmakers emphasized the need for action.
President Donald Trump recently pledged to revitalize the American shipbuilding industry for both commercial and military purposes, proposing the creation of a new office of shipbuilding in the White House. The heads of four major labor unions have also urged Trump to bolster American shipbuilding and impose tariffs and penalties against China for its dominance in the sector.
The report underscores China’s remarkable transformation in shipbuilding over the past two decades, with the China State Shipbuilding Corporation emerging as a key player. The firm leverages Beijing’s “military-civil fusion” strategy to blur the lines between defense and commercial sectors, selling most of its commercial production to foreign buyers, including U.S. allies. This practice channels substantial funds to Chinese shipyards that also produce warships, facilitating China’s naval modernization and technology acquisition.
To compete with China, the report suggests that the U.S. should invest in rebuilding its shipbuilding capabilities and address the challenges posed by China’s strategic approach.
The report suggests boosting the shipbuilding industry and collaborating with allies to enhance shipbuilding capabilities beyond China. Short-term strategies include implementing measures to ensure fair competition and disrupting China’s ambiguous dual-use system, like imposing docking fees on Chinese vessels and severing financial and business relations with CSSC and its affiliated companies. The Trump administration has put forward plans for additional fees on ships with ties to China that visit U.S. ports. Recently, a consortium led by BlackRock has agreed to purchase shares in 43 ports worldwide, including those adjacent to the Panama Canal, from a conglomerate based in Hong Kong.
