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China's Shipbuilding Industry and Policies Affecting It REPORT ON CHINA’S SHIPBUILDING INDUSTRY AND POLICIES AFFECTING IT OECD SCIENCE, TECHNOLOGY AND INDUSTRY POLICY PAPERS April 2021 No. 105 2 REPORT ON CHINA’S SHIPBBUILDING INDUSTRY AND POLICIES AFFECTING IT This paper was approved and declassified by the OECD Council Working Party 6 on Shipbuilding (WP6) on 26 November 2020, and was prepared for publication by the OECD Secretariat. Note to Delegations: This document is also available on O.N.E under the reference code: C/WP6(2020)8/FINAL This document, as well as any data and any map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. © OECD (2021) The use of this work, whether digital or print, is governed by the Terms and Conditions to be found at http://www.oecd.org/termsandconditions/ OECD SCIENCE, TECHNOLOGY AND INDUSTRY PAPERS REPORT ON CHINA’S SHIPBBUILDING INDUSTRY AND POLICIES AFFECTING IT 3 Report on China’s shipbuilding industry and policies affecting it OECD Shipbuilding Unit1 Abstract 1. This report analyses the structural characteristics of China’s shipbuilding industry, notably through comparison of other major shipbuilding economies. Building upon previous reports drafted in 2008 and 2011, it aims to analyse China’s shipbuilding sector from a holistic and multidisciplinary perspective (e.g. the interconnection between trade, competition, monetary, financial, fiscal and industrial policies), with a particular emphasis on government support measures. Key findings from these analyses suggest that: 1) China’s shipbuilding industry has been labelled as a strategic industry, which may equally explain China’s intention to move up the shipbuilding value chain, 2) State-owned conglomerates hold a lot of influence in China’s shipbuilding industry, 3) Government support to the Chinese shipbuilding industry is alleged to have contributed to global excess capacity. Keywords: Shipbuilding, China, State-owned enterprise, Support measures, Excess capacity 1 For further information please contact the OECD Directorate for Science, Technology and Innovation at [email protected] or [email protected]. OECD SCIENCE, TECHNOLOGY AND INDUSTRY PAPERS 4 REPORT ON CHINA’S SHIPBBUILDING INDUSTRY AND POLICIES AFFECTING IT Table of Contents LIST OF ABBREVIATIONS ....................................................................................................................................... 6 1. INTRODUCTION ................................................................................................................................................ 7 2. THE CHINESE SHIPBUILDING INDUSTRY ............................................................................................................ 9 2.1. GLOBAL PERSPECTIVE .............................................................................................................................................. 9 2.2. TYPOLOGY OF THE CHINESE SHIPBUILDING SECTOR ...................................................................................................... 11 2.2.1. Major shipbuilding conglomerates ........................................................................................................... 12 2.2.2. Geographic distribution of main ship construction facilities .................................................................... 13 2.2.3. Chinese shipbuilding associations ............................................................................................................ 16 2.2.4. Marine equipment .................................................................................................................................... 16 2.3. PRODUCTION AND ORDERS ..................................................................................................................................... 18 2.4. ORDERS FROM DOMESTIC SHIP OWNERS .................................................................................................................... 24 3. POLICIES AFFECTING THE CHINESE SHIPBUILDING INDUSTRY ......................................................................... 27 3.1. OVERVIEW OF STRATEGIC POLICY INSTRUMENTS .......................................................................................................... 27 3.1.1. The 13th Five-Year Plan (2016-2020) and sectoral implementation ......................................................... 28 3.1.2. Made in China 2025 .................................................................................................................................. 30 3.1.3. Historic overview of policies in the 1990s and 2000s ............................................................................... 32 3.2. IMPLEMENTATION OF STRATEGIC POLICY INSTRUMENTS ................................................................................................ 34 3.2.1. Overcapacity ............................................................................................................................................. 35 3.2.2. Support measures ..................................................................................................................................... 38 3.2.3. Financing .................................................................................................................................................. 46 3.2.4. State-Owned Enterprises .......................................................................................................................... 50 3.2.5. Market access ........................................................................................................................................... 54 3.2.6. Green technologies and smart shipbuilding ............................................................................................. 57 3.3. TRANSPARENCY .................................................................................................................................................... 58 4. CONCLUSION .................................................................................................................................................. 60 ANNEX I: THE MARITIME SILK ROAD AND THE BELT AND ROAD INITIATIVE ....................................................... 64 ANNEX II: THE INTELLIGENT SHIP DEVELOPMENT ACTION PLAN FOR 2019 - 2020 .............................................. 66 ANNEX III: OVERVIEW OF RESEARCH, DEVELOPMENT AND INNOVATION PROJECTS IMPACTING THE CHINESE SHIPBUILDING INDUSTRY ................................................................................................................................... 69 ENDNOTES.......................................................................................................................................................... 73 Tables Table 1. Orderbook for selected shipbuilding economies, December 2019 .......................................................... 11 Table 2. Ownership structure of the top 100 Chinese shipyards in 2019 ............................................................. 12 Table 3. Deliveries and contracts of shipyards owned by CSSC and CSIC in 2018 ............................................. 12 Table 4. Ship deliveries and contracts of shipyards owned by COSCO shipping heavy industry in 2019............ 13 Table 5. Two major shipyards of the Yangzijiang shipbuilding group ................................................................. 13 Table 6. Shipyard distribution and ship construction by province in China, 2019 ................................................ 14 Table 7. Main shipyards in the Yangtze River area ............................................................................................... 14 Table 8. Main shipyards of the East and South China coasts ................................................................................ 15 Table 9. Main shipyards of the Pearl River area ................................................................................................... 15 OECD SCIENCE, TECHNOLOGY AND INDUSTRY PAPERS REPORT ON CHINA’S SHIPBBUILDING INDUSTRY AND POLICIES AFFECTING IT 5 Table 10. Selected shipyards of the Yellow River, Heilong River and North China coast area ............................ 15 Table 11. The role of Chinese shipbuilding associations ...................................................................................... 16 Table 12. China's major marine equipment manufacturers in 2018 ...................................................................... 16 Table 13. Major products of China’s marine equipment industry in 2018 ............................................................ 18 Table 14. Global completions of seagoing vessels by selected ship types, 2010-2019 ......................................... 18 Table 15. Activity indicators of China's shipbuilding industry, 2017-2019 ......................................................... 19 Table 16. Global contracts of LNG carriers and VLCCs, 2016-2019 ................................................................... 22 Table 17. Orderbooks of China, Korea and Japan for large-sized and high value-added vessels, February 2020 .............................................................................................................................................................. 23 Table 18. New contracts by owner countries in CGT, 2017-2019 .......................................................................
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