The U.S. share of the global commercial shipbuilding market has dropped to just 0.1%, while China has become the dominant player in just 20 years, accounting for over half of the market.
This presents significant economic and national security challenges for the United States and its allies, according to a report released Tuesday by the Center for Strategic and International Studies.
One Chinese shipbuilder built more commercial ships by tonnage in 2024 alone than the whole U.S. shipbuilding sector had produced since the end of World War II.
The bipartisan think tank based in Washington stated in its 75-page analysis that China already possesses the greatest naval fleet in the world.
In addition to lowering economic possibilities and advancing China’s aspirations for global force projection, the report stated that “the erosion of U.S. and allied shipbuilding capabilities poses an urgent threat to military readiness.”
As China, the second-largest economy in the world with plans to change the global order, becomes a bigger threat to the United States, worries about the status of American shipbuilding have been mounting in recent years.
During a December congressional hearing, lawmakers and senior officials called for action.
President Donald Trump promised Congress last week that his Republican government would establish “a new office of shipbuilding in the White House” and “resurrect” the American shipbuilding industry for both military and commercial vessels.
Trump remarked, “We used to make so many ships.” Although we don’t produce them as frequently as we used to, we plan to do so quickly shortly. It will have a significant effect.
The leaders of four significant labor unions urged Trump in February to increase American shipbuilding and impose tariffs and other “strong penalties” on China for its growing hegemony in that industry.
Matthew Funaiole, a senior fellow in the China Power Project at CSIS and a co-author of the research, stated,
“What we are seeing now is recognition of the strategic significance of shipbuilding and port security and the related challenges posed by China.”
Shipbuilding issues are “a fairly bipartisan issue,” according to Funaiole.
Laptops 1000With efforts focused on a single state-owned company, China State Shipbuilding Corporation, or CSSC, the report claimed that China’s shipbuilding industry underwent “a striking metamorphosis” over the previous 20 years, moving from a “peripheral player” to the leading player on the international market.
Meanwhile, China’s navy has grown significantly.
China was operating 234 warships last year, compared to the U.S. Navy’s 219, but the U.S. still had an advantage in guided missile cruisers and destroyers, according to a CSIS estimate.
The researchers focused on the Chinese company’s use of Beijing’s “military-civil fusion” strategy, which blurs the boundaries between the nation’s defense and commercial sectors to provide recommendations for the U.S. to compete with China.
They discovered that CSSC, which constructs both military and commercial ships, sells three-quarters of its commercial output to customers outside of China, such as South Korea, Japan, Denmark, France, and Greece—all of which are allies of the United States.
According to the research, these international companies are spending billions of dollars on Chinese shipyards that also produce warships, which is helping China modernize its fleet and giving Chinese defense contractors access to vital dual-use technologies.
As a long-term solution, the CSIS researchers recommended that the United States revive its shipbuilding sector and collaborate with allies to increase its shipbuilding capabilities outside of China.
They suggested taking steps to level the playing field and “disrupt China’s murky dual-use ecosystem” in the short term, like imposing docking fees on Chinese-built ships and severing U.S. financial and commercial links with CSSC and its affiliates.
The Trump administration has proposed new fees on ships with ties to China that visit American ports.
Last Monday, a Hong Kong-based corporation decided to sell shares in 43 ports worldwide, including the two ports on either side of the Panama Canal, to a consortium led by BlackRock.
