China Intensifies Monitoring of Shipbuilding Capacity to Avert Oversupply Risks

China Monitors Shipbuilding Capacity Amid Global Dominance

China is actively monitoring its vast shipbuilding capacity to prevent an oversupply of production facilities in the global industry. This strategic oversight comes as the nation maintains its position as the world's leading shipbuilder, holding a commanding share of the international market. The initiative is aimed at fostering sustainable growth and mitigating the risks associated with excessive investments in shipyards.

Proactive Measures by Industry Regulators

The China Association of the National Shipbuilding Industry (CANSI), a government-backed organization, is at the forefront of these monitoring efforts. Tan Naifen, deputy secretary general of CANSI, emphasized the importance of a balanced approach to production and demand. In a recent interview, Tan highlighted that authorities are aware of the potential dangers posed by 'reckless investments' in shipyard facilities.

To address these concerns, a 'checks-and-balances mechanism' has been established to prevent the boom-and-bust cycles that have historically destabilized the industry. Tan stated, 'We are striving to strike a balance between capacity and orders for new vessels,' underscoring the commitment to aligning production capabilities with market demand.

China's Unrivaled Position in Global Shipbuilding

China has solidified its position as the dominant force in global shipbuilding, maintaining leadership across key industry indicators for 14 to 15 consecutive years. According to the Ministry of Industry and Information Technology (MIIT), Chinese shipyards command 55.7% of global shipbuilding completion volume, secure 74.1% of worldwide new orders, and hold 63.1% of the total global order book as of 2024. Other reports indicate China holds a 70% global market share.

The country's shipbuilding capacity is immense; for instance, one Chinese shipbuilder constructed more commercial vessels by tonnage in 2024 than the entire U.S. shipbuilding industry has built since the end of World War II. Mainland China currently has the capacity to build approximately 65 million deadweight tons (DWT) of large vessels annually, with projections for this figure to increase to 70 million DWT.

Current Industry Performance and Outlook

Despite the cautionary stance on oversupply, the Chinese shipbuilding sector is currently performing robustly. Chinese shipyards are operating at 75% of their capacity, reflecting strong demand for new vessels. In the first half of 2025, the nation's shipbuilders reported a combined revenue of 398.8 billion yuan (approximately US$56 billion), marking a year-on-year increase of 20.8%. The gross profit margin for the sector reached a record high of 9.7%.

While China's share of global new orders saw a decline from 75% to 56% in the first half of 2025, attributed to a broader slowdown in global contracting and shifts in vessel types, its leading position is expected to remain firm due to labor shortages and limited capacity in rival nations. Chinese shipyards have secured orders extending as far as 2028 and 2029, providing long-term stability.