Inside China Business China’s overcapacity and shipbuilding
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Over half of the world’s ships are now built in Chinese shipyards, which have grown by nearly 3 times in just ten years. At no time in recent history, and perhaps ever, has the world’s shipbuilding industry been so dominated by a single country.
In order to meet the skyrocketing demand for new ships, which has more than doubled in just the past four years, China first had to invest heavily in shipyard capacity that could meet that demand.
The recent story of Chinese shipbuilding is like so many others. China develops a strategy to dominate in a certain industry, then builds out domestic factories and logistics. At the same time, China’s overseas companies source the raw materials that will be required, and stockpile them.
That process might be referred to as “overcapacity“, but it is temporary. Orders come in, the factories turn on, and prices fall, stimulating demand further.
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Closing scene, Shanghai New International Expo Center, Pudong, Shanghai
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