Economy

Innovation urged in shipping industry

By Wang Ying (China Daily)
Updated: 2010-09-09 15:48

SHANGHAI - After surpassing South Korea to become the world's largest shipbuilder by the volume of deadweight tonnage completed, China has no time to relish the achievement. Top on the agenda of the nation's shipbuilding industry is strengthening technological innovation and design capability, industry analysts said.

The latest figures from the China Association of the National Shipbuilding Industry show that in the first half of this year, China produced 41.1 percent of world's ships, while its orders received accounted for 46.2 percent of the global market.

While the global financial meltdown dealt a great blow to other shipbuilding nations, leaving them downsized or shut down, Chinese shipbuilders made impressive progress on the back of robust cash flow and increasing demand for low-price ships.

China's yards delivered 22.7 million deadweight tons in the first six months this year, while South Korea delivered 18.3 million deadweight tons, according to Clarksons, a leading shipping services provider.

However, unlike traditional outstanding shipbuilders in Japan and South Korea, which solidified their positions by technological innovation, China took a shortcut in this industry via intense investment.

"Although China has become the world's largest shipbuilder, it is still not a powerful ship manufacturer," said Zhang Shengkun, president of Shanghai Society of Naval Architects and Marine Engineers, which was established in 1951.

According to Zhang, design is the lifeline of manufacturing.

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"It is understandable to copy others' design at the very beginning of industrial development, but imitation cannot last long when you compete with other powerful shipbuilding nations," said Zhang, who is also a professor specialized in shipbuilding at Shanghai Jiao Tong University.

"Design is important because it is vital in deciding the latest ship trends, and market demand is directly led by product innovation," added Zhang.

According to research done by Zhang and his team, Chinese shipbuilding industry design lags 10 years behind counterparts in the United States, Japan and South Korea, while manufacturing and management ability lags four to seven years behind.

Currently, international standards for ships change annually, and pollution reduction requirements grow higher year on year. "This will be a great challenge for Chinese shipbuilders," Zhang said.

"I found Chinese companies are busy meeting these standards in recent years," Zhang said.

The situation would be much better if Chinese shipbuilders could initiate the trend rather than simply being a follower," he added.

Global shipbuilding output is estimated to exceed 200 million deadweight tons in 2010, and China's output alone will reach 80 million deadweight tons this year.

Shanghai has the nation's first shipyard, now known as Jiangnan Shipyard (Group) Co Ltd, which was established in 1865.

Shanghai has been constructing the nation's largest ship building base since 2005, and it will be able to deliver as many as 12 million deadweight tons annually once construction is completed in 2015.