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In a move that underscores its dominance in global shipbuilding, China’s top two shipbuilders have finalized a merger initiated in 2019. This $16 billion deal is expected to further widen the gap between China and the United States, as President Donald Trump strives to revive the nation’s struggling shipbuilding industry.
China has risen to the forefront of global shipbuilding over the past two decades. According to data from Washington D.C.’s Center for Strategic and International Studies, in 2024, China’s largest state-owned shipbuilder, China State Shipbuilding (CSSC), delivered more commercial vessels by tonnage than the entire U.S. shipbuilding industry has produced since World War II.
China’s shipbuilding capacity now extends to naval power as well. The People’s Liberation Army Navy boasts the world’s largest fleet and is producing nearly three ships for every one launched by the U.S. Navy, according to Admiral Samuel Paparo, head of the Indo-Pacific Command.
This week, CSSC is absorbing China Shipbuilding Industry Corporation, with trading in both companies’ shares suspended. Together, these two firms accounted for almost 17 percent of the global market in 2024 based on new order data from maritime analysis firm Clarksons Research.
Originally part of the same organization, the two firms were split in 1999 as part of Chinese Communist Party reforms aimed at introducing limited competition among state-owned enterprises. The merger is expected to reduce costs and mitigate the impact of U.S. trade actions.
State media have praised this deal as a step towards eliminating inefficiencies, optimizing resource allocation, and enhancing China’s prospects amid geopolitical tensions and competition from South Korea and Japan. The Trump administration has initiated new port fees on Chinese vessels, claiming unfair trade practices and state subsidies. As a result, China’s share of new shipbuilding orders has dropped to 52 percent from 72 percent in the first half of this year.
Tom Shugart, an adjunct senior fellow at the Center for a New American Security, stated that China’s massive shipbuilding capacity remains under a single, state-controlled enterprise. “The scale, coupled with the integration of military and commercial production, will remain a central enabler of China’s naval expansion—and a key factor in eroding the U.S.–China maritime balance.”
Xu Yi, an analyst at Haitong Futures, said this merger marks the largest strategic restructuring in China’s shipbuilding history, aimed at optimizing resource allocation and enhancing competitiveness globally. President Donald Trump expressed his commitment to “resurrect” both commercial and military shipbuilding in the United States during his March 6 address to Congress.
Trump lamented that only 0.2 percent of the world’s ships are built domestically compared with nearly three-quarters in China, pledging to boost U.S. shipbuilding capacity rapidly.
