A U.S. think tank has urged the government to cooperate with allies such as South Korea and Japan to counter China’s growing dominance in the shipbuilding industry. The Center for Strategic and International Studies (CSIS) warns that China’s shipbuilding industry poses a significant threat to U.S. national security and calls for immediate action from the Trump administration. The think tank emphasized that the U.S. should reintroduce and swiftly pass the SHIPS for America Act, which contains provisions for strengthening the U.S. shipbuilding industry through strategic alliances with key partners.
The CSIS report, released on Monday, assessed that China has become the world’s leading shipbuilding power, pushing out the U.S. and its allies. China’s largest state-owned shipyard produced more ships last year than the entire U.S. shipbuilding industry has built since World War II. China’s share of the global shipbuilding market was 53.3% last year, a result of two decades of strategic investment by the Chinese government.
The CSIS raises concerns about China using its rapidly growing shipbuilding technology to enhance the capabilities of its naval forces. China outpaces the U.S. Navy in vessel construction and boasts the world’s largest navy by ship count. China is expected to have 425 ships by 2030.
In contrast, the U.S. Navy’s current fleet comprises about 300 ships. This disparity in naval strength threatens the military readiness and deterrence capabilities of the U.S. and its allies in the Indo-Pacific region.
The U.S. holds only 0.1% of the global shipbuilding market. This is due to decades of underinvestment since the Cold War and the loss of competitiveness of U.S. shipbuilding companies under government protection.
To address this imbalance, the CSIS advocates for collaboration with South Korea (29.1% market share) and Japan (13.1% market share).
The CSIS report underscores that China generates billions in revenue by exporting 75% of its shipyard output while transferring critical shipbuilding technologies to its navy. This has modernized China’s naval forces while simultaneously marginalizing the U.S. and its allies in the commercial shipbuilding market.
CSIS recommends that the U.S. government and Congress make substantial, long-term investments in domestic and allied shipbuilding industries to counter this trend. This strategy aims to disrupt China’s civil-military integration and reduce its market dominance. To achieve this, it emphasized the need to reintroduce and pass the shipbuilding bill, which was discarded last December.
Brent Sadler, acting Assistant Secretary of the U.S. Navy for research, development, and acquisition, stated the challenges facing the U.S. shipbuilding industry. He noted that the current production rates fall short of what is needed to sustain and enhance naval combat power.
Meanwhile, U.S. federal regulations prohibit the construction of naval vessels in foreign shipyards, except when the president allows for national security considerations. The annual defense appropriations bill also includes provisions prohibiting budget allocation for building naval ships outside the United States.
