China monitors shipbuilding capacity to prevent oversupply, state-backed group says
Authorities have established a checks-and-balances mechanism to ensure the industry’s sustainable growth
China is closely monitoring its shipbuilding capacity to avoid an oversupply of production facilities in a global industry dominated by the country, according to an official from the China Association of the National Shipbuilding Industry (CANSI).
Tan Naifen, deputy secretary general of the government-backed organisation, said in an interview with the Post on Wednesday that authorities recognised the risks associated with reckless investments in shipyards. As a result, they had established a checks-and-balances mechanism to prevent boom-and-bust cycles and ensure the industry’s sustainable growth.
“The authorities and our association are adopting a cautious approach to shipbuilding capacity, even though the industry is currently performing well [because of] our manufacturing strength and a complete supply chain,” she said.
“We are striving to strike a balance between capacity and orders [for new vessels].”
Chinese shipyards currently hold a 70 per cent share of the global market, with 75 per cent of their capacity in use.
In the first half of this year, the country’s shipbuilders, including state-owned giants and private enterprises, reported a combined revenue of 398.8 billion yuan (US$56 billion) – a year-on-year increase of 20.8 per cent. Gross profit margin reached an all-time high of 9.7 per cent, according to Tan.