China's Shipbuilding Industry: Moving Towards High-End Intelligence Against the Trend - Transitioning from a Major Shipbuilding Country to a Strong Shipbuilding Nation

Affected by the downturn in the global shipping market, our country's shipbuilding enterprises face prominent issues such as difficulties in delivery and profitability. However, the shipbuilding industry is making efforts against the trend, releasing positive signals such as the growth of key enterprises against the trend, steady enhancement of high-end design capabilities, and a shift towards intelligent manufacturing. It is expected that by 2020, our country will initially achieve the transformation from a major shipbuilding country to a strong shipbuilding country.

Shortly after delivering the domestic large container ship "CMA CGM Vasco da Gama", China Shipbuilding Industry Corporation recently achieved another success in the field of ultra-large container ship manufacturing: signing a large order for 8 container ships with China Ocean Shipping Company, with a total cost of 5.7 billion yuan.

In the first half of the year, under the difficult external market environment, our country's shipbuilding industry completed 18.53 million deadweight tons, a year-on-year increase of 6.3%. However, due to the downturn in the global shipping market and the continuous decline in oil prices, new ship orders have significantly decreased, the marine engineering equipment market has noticeably shrunk, and issues such as difficulties in delivery and profitability are prominent.
 
    "In the context of a significant decline in new ship demand, the state has intensively introduced a series of industrial policies to support the development of the shipbuilding industry, accelerating the pace of structural adjustment in the shipbuilding industry, enhancing comprehensive competitive advantages against the trend, and withstanding various difficulties and tests," said Zhang Xiangmu, director of the Equipment Industry Department of the Ministry of Industry and Information Technology, in an interview with the Economic Daily. By 2020, our country aims to initially achieve the transformation from a major shipbuilding country to a strong shipbuilding country.

Key enterprises are making efforts against the trend.

Since the beginning of this year, our shipbuilding industry has faced a more severe market test. According to statistics, in the first half of the year, our country undertook new ship orders of 11.19 million deadweight tons, a year-on-year decrease of 72.6%. "Since the international financial crisis, the international market share of our new ship undertakings has declined for the first time," said Jin Peng, secretary-general of the China Shipbuilding Industry Association.

In fact, the entire international shipping market was very sluggish in the first half of the year, with global new ship transactions decreasing by more than half year-on-year. However, our key shipbuilding enterprises have demonstrated their advantages in adversity, successfully delivering ships, vigorously developing new ship types, seizing international market orders, and gaining an advantage in fierce market competition.

The concentration of our shipbuilding industry has further increased, and the optimization of industrial organization has begun to show results. According to statistics, in the first half of the year, the top 10 enterprises in terms of shipbuilding completion volume accounted for 57.5% of the national total, an increase of 6.9 percentage points compared to the end of 2014; the top 10 enterprises in terms of new ship orders accounted for 75.4% of the national total, an increase of nearly 20% compared to the end of 2014, forming a group of marine engineering equipment enterprises with strong international competitiveness.

At the same time, in terms of the ship's supporting equipment loading capacity, our country can now meet over 80% of the loading demand for supporting equipment for bulk carriers, oil tankers, and container ships. In recent years, key ship supporting enterprises have increased their investment in scientific research and development, strengthened product development and market expansion, achieved breakthroughs in self-owned brand supporting products, and significantly enhanced ship supporting capabilities.

"Currently, the international ship market is still at a low point in the industrial adjustment cycle, and it will take some time to digest the excess capacity," Zhang Xiangmu said. In the future, the demand structure of the shipbuilding industry will undergo significant changes, with weak demand for conventional ship types such as bulk carriers, while marine engineering equipment and high-tech ships will become the hotspots of future market demand.

Enhanced high-end design capabilities.

At the end of June, a 37,000-ton asphalt ship designed by Shanghai Shipbuilding Research and Design Institute and built by China National Offshore Oil Corporation successfully launched. This is the world's largest independent cargo tank asphalt ship, marking that our country has reached a global level in the design of special liquid cargo ships.

Zhang Xiangmu pointed out that high-tech ships and marine engineering equipment are the high-end of the shipbuilding industry's value chain and are also the focus of our shipbuilding industry's future development. Fortunately, our shipbuilding industry's design and construction capabilities for high-end products have significantly improved, and the transformation of products has shown remarkable results.

The main forces in the world shipbuilding industry will still be China, South Korea, and Japan, and high-end design and technological innovation will undoubtedly be key elements of future competition. "By 2025, the international market share of major marine engineering equipment and high-tech ships independently developed, designed, and built by our country should reach 40% and 50%, respectively, and the design and manufacturing technology in some fields should reach international standards," Zhang Xiangmu said.

Manufacturing models are moving towards intelligence.

In the hull workshop of COSCO Kawasaki Ship Engineering Co., Ltd. in Nantong, Jiangsu, robots are constantly waving their arms, and under the splashing sparks, steel is being cut into various shapes and automatically classified and arranged. It is understood that most of the company's workshops have achieved automated operations, with a steel plate recycling rate exceeding 95%, and the automated production line has improved the production efficiency of the corresponding processes by about 70%.
 
    "Ship manufacturing is developing towards intelligent design, intelligent products, refined management, and integrated information," Zhang Xiangmu said. The world's strong shipbuilding countries have already proposed the goal of building intelligent shipyards. The "Made in China 2025" initiative also proposes to adapt to the new trends of global shipbuilding competition and ship technology development, using digital, networked, and intelligent manufacturing as breakthroughs to continuously improve the level, quality, and efficiency of the shipbuilding industry's development.

"On the other hand, the rigid rise in labor costs in our country, compared to Japan and South Korea, is gradually diminishing our advantages, which also forces our shipbuilding industry to transform and upgrade, vigorously developing intelligent manufacturing," Jin Peng said.

Guo Dacheng, president of the China Shipbuilding Industry Association, stated that intelligent manufacturing has strategic significance for our shipbuilding industry, and the shipbuilding industry must strengthen research on intelligent manufacturing technologies and accelerate the process of intelligent shipbuilding.