Dire straits provide China's shipbuilders great opportunities

Dominance deepens

China's dominance in global shipbuilding has deepened in recent years, underscoring a broader shift in industrial capacity and maritime demand toward Asia.

The country's shipbuilding output reached 53.69 million DWT in 2025, up 11.4 percent year-on-year and accounting for 56.1 percent of the global total, according to the Ministry of Industry and Information Technology.

New orders reached 107.82 million DWT, representing a 69 percent share of the global market.

Amid shifting geopolitical and regulatory dynamics, countries are increasingly building up their own oil tanker fleets to safeguard energy security.

Recent adjustments to the US Jones Act, also known as the US Merchant Marine Act of 1920, have drawn wide attention. The federal statute requires goods transported between US ports to be carried on vessels owned and operated by US citizens or permanent residents.

However, the measure was temporarily waived for 60 days in mid-March to help ease the cost of moving oil, gas and other commodities. The waiver allows foreign-flagged vessels to transport goods between US ports during this period to facilitate the flow of energy supplies across the country.

Tensions surrounding the Strait of Hormuz have underscored the importance of energy transport security and also driven demand for more diversified tanker fleets, greater operational flexibility and shorter delivery cycles.

This has created fresh opportunities for Chinese shipbuilders, given their strong production capacity, cost competitiveness and improving technological capabilities, particularly in segments such as oil tankers, LNG carriers and other energy transport vessels, experts said.

"The convergence of geopolitical tensions and regulatory adjustments is reinforcing structural demand for energy transport vessels in regions including the Middle East, Europe, North America and parts of Asia, and China is emerging as a primary beneficiary of that shift," said Liu Ying, a researcher at Renmin University of China's Chongyang Institute for Financial Studies in Beijing.

Liu noted that disruptions around key choke points such as the Strait of Hormuz, combined with policy moves like the waiver of the Jones Act, are accelerating changes in global shipping patterns.

Zhang Bo, a professor at the China Institute for Studies in Energy Policy of Xiamen University in Fujian province, said energy security concerns are prompting many countries and shipowners to prioritize flexibility, fleet diversification and faster delivery — areas where Chinese shipyards have developed a clear competitive edge.

Liu Guiyun, a professor at Ningbo University's faculty of maritime and transportation in Zhejiang province, said China's ability to deliver vessels at scale, with shorter lead times and increasingly advanced specifications, is helping it capture a larger share of high-value segments of the industry, from multipurpose chemical tankers to LNG carriers.

"This is no longer just about cost advantage," she said. "It reflects a broader upgrade in engineering capability and industrial coordination."

Looking ahead, these dynamics could reinforce China's lead in global shipbuilding, particularly in high-end oil tankers and LNG carriers, while forcing domestic shipyards to move up the value chain and compete more directly in technology-intensive segments, she said.

High-end tankers

Those capabilities are already being translated into high-end vessel deliveries.

In late March, a 307,000-DWT very large crude carrier (VLCC), Empire Hope, was delivered in Dalian to South Korean owner Cido Shipping Group, according to Dalian Customs.

Built by Dalian Shipbuilding Industry Co, another subsidiary of CSSC, the vessel represents the latest generation of China's VLCC designs.

Measuring 333 meters in length, 60 meters in beam and 30 meters in depth, the tanker features a deck area of over 18,000 square meters. From keel to bridge, it rises to the height of a 20-story building, with a coating area equivalent to around 76 soccer fields.

Designed for port and waterway flexibility, the vessel can carry more than 2 million barrels of crude oil at a design draft of 20.5 meters while transiting the Strait of Malacca, the narrow shipping lane that connects the Pacific and Indian Oceans, said Bi Hongkun, project manager at Dalian Shipbuilding.

The combined improvements, including a six-cylinder main engine and an exhaust gas desulfurization system, dramatically boost energy efficiency and environmental performance, with key indicators reaching world-class levels, said Bi.

China's VLCC technology is undergoing continuous improvements, he said. Future vessels will incorporate new green fuels and third-generation wind-assisted propulsion technology to meet the latest global environmental requirements.

With tightening environmental standards and evolving fuel technologies, shipbuilders are expected to further accelerate the adoption of digital control and greener propulsion systems, further reshaping competition in the global shipbuilding industry.

More evidence of China's push into high-end, green vessel segments can be seen in the delivery of advanced LNG carriers.

On April 8, under the supervision of Shanghai Customs, a large LNG carrier departed from Changxing Island with 29 crew members on board, marking its delivery to its overseas client three months ahead of schedule.

The vessel is part of Hudong-Zhonghua Shipbuilding (Group)Co's fifth-generation "Changheng" series of LNG carriers and is equipped with the latest intelligent exhaust gas re-circulation system, offering lower overall energy consumption and improved performance under low-temperature conditions.

Wang Jiaying, assistant general manager and head of marketing at Shanghai-based Hudong-Zhonghua Shipbuilding, a subsidiary of CSSC, said the early delivery reflects the company's continued focus on high-end shipbuilding and aligns with the global shift toward greener shipping.

As the global shipbuilding market enters a period of consolidation at elevated levels, high-value, environmentally friendly vessels are becoming a key area of competition, Wang added.