The Consolidation of China's Shipbuilding Industry

For Washington and its allies, the consolidation of Chinese shipbuilding operations highlights the significant gap that has emerged, and the challenges they face in closing it. China is solidifying its position as the global leader in shipbuilding with the ongoing merger between two state-owned conglomerates, China State Shipbuilding Corporation (CSSC) and China Shipbuilding Industry Corporation (CSIC). This strategic move will create a single, dominant entity, further strengthening Beijing's commercial and naval capabilities. This consolidation, which has been in development since 2019, aims to streamline operations and eliminate redundancy, thereby enhancing efficiency and coordination. The newly merged entity is projected to control assets worth approximately $56 billion and generate $18 billion in annual revenue, with some estimates placing these figures even higher.

CSSC, already the world’s largest shipbuilder, is reported to have a 2024 commercial vessel output (by tonnage) that exceeds the entire U.S. shipbuilding output since the end of World War II. The merger with CSIC, the country’s second-largest conglomerate, is expected to create a formidable, integrated shipbuilding powerhouse. Matthew Funaiole, a senior fellow at the China Power Project at CSIS, notes that the completed merger would make CSSC the world's largest publicly traded shipbuilder by a significant margin. The consolidation aligns with China's long-term strategy to reduce internal competition and expand its global market dominance. While the number of Chinese shipyards has decreased since 2009, total output has continued to increase, with China projected to account for over 50% of global commercial shipbuilding output in 2024.

This dominance is also evident in foreign ship orders, where Chinese yards have secured billions of dollars in revenue. Many of these yards operate under Beijing’s "military-civil fusion" strategy, which blurs the lines between commercial and defense sectors to leverage one for the other. As of January 2025, China is expected to hold 62% of the global order book for merchant ships through 2033, including more than 80% of new container ships and 30% of LNG carriers. According to Funaiole, the merger will expand China's shipbuilding capacity and capability, granting Beijing more centralized control and facilitating the transfer of technology, personnel, and assets between divisions.