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17 February 2024

China’s Shipyards Are Ready for a Protracted War. America’s Aren’t.

Niharika Mandhana

China emerged as a global power by turning itself into the world’s factory floor. It is expanding that power, and its military might, with another striking industrial feat: becoming the world’s shipyard.

More than half of the world’s commercial shipbuilding output came from China last year—making it the top global shipmaker by a wide margin. The once-prolific shipyards of the West that helped forge empires, expand trade and win wars have shriveled. Europe accounts for just 5% of the world’s output, while the U.S. contributes next to nothing. Most of what China doesn’t build comes from South Korea and Japan.

“The scale [of China’s shipbuilding] is just almost hard to fathom,” said Thomas Shugart, an adjunct senior fellow at the Center for a New American Security whose research focuses on maritime competition. “The degree to which it dwarfs American shipbuilding is just unbelievable.”

This shipbuilding empire is a symbol of China’s historic transformation from an inward-looking continental nation to a maritime power. But it is more than that. It is a pivotal strategic asset for Beijing as Chinese leader Xi Jinping tries to reshape the world order in peacetime and prepares to prevail over his nation’s rivals during war.

Giant Chinese shipbuilding firms that crank out merchant ships for the world are often the same ones building warships for China’s navy. Their shipyards are thriving, with billion-dollar contracts pouring in not just for warfighting gray hulls but also for containerships, oil tankers and bulk carriers for shipping lines from China, the West and even Taiwan.

With their order books full for years to come, the shipyards have expanded, trained enormous pools of workers and built sprawling supply chains.

China’s military planners have leveraged all that to build up the world’s largest navy, in hull count—a force central to Xi’s greatest ambitions of projecting power overseas, protecting the sea lanes that connect China to the world and absorbing Taiwan.


The huge Hudong Zhonghua shipyard, in central Shanghai, is being relocated to Changxing Island at the mouth of the river Yangtze. 


China is concentrating a great deal of ship-making power in one place. 

America’s once-robust shipbuilding industry has shrunk. It no longer produces any significant number of commercial oceangoing ships. Several shipyards have only one big customer, the Navy, and those shipyards are often battling backlogs, worker shortages, a paucity of suppliers and cost overruns.

The major difference between the Chinese and American shipbuilding industrial bases is that “China benefits from a massive commercial shipbuilding workload,” Rear Adm. Thomas J. Anderson said to a congressional subcommittee in May, when he was the program executive officer for ships in the U.S. Navy. Meanwhile, he said, the U.S. government largely goes it alone, bearing all the costs of the ships and associated infrastructure.

“Clearly China’s commercial shipbuilding industry provides them a massive advantage when it comes to shipbuilding capacity,” he said.

In a protracted conflict, China’s shipyards would give its navy a significant upper hand. Sized to build at wartime rates, they would be able to quickly accelerate production, replace lost ships and repair damaged ones. That is a capability U.S. shipyards brought to the fight during World War II, building Allied vessels faster than German U-boats could sink them.

Today, America’s shipyards are struggling to keep up with peacetime demand. Submarines are bogged down by maintenance delays and new ones are behind schedule. The Navy, for instance, is expecting two new Virginia-class submarines a year, but is receiving the boats at the rate of 1.4, a Defense Department official said last year.

There isn’t enough trained labor, dry docks are in short supply, and in the case of some critical components, only a handful of vendors are still standing.

This is especially troubling, U.S. strategists say, in light of what the Ukraine conflict has shown: Wars can last a long time and fighting them requires industry. America’s weapons factories have struggled to keep up with Ukraine’s battlefields. Its munition makers—and shipyards—aren’t ready for a war with China.


Chinese Coast Guard Blasts Philippine Boats With Water Cannons.

Chinese coast-guard ships blasted water cannons at Philippine boats last year in the South China Sea near Scarborough Shoal. The Philippines and the U.S. condemned China’s actions. 

If the U.S. intervened in a conflict over Taiwan, American forces would need to stop Chinese ships from reaching the island and discharging equipment and thousands of troops. Each side would try to take as many enemy ships off the board as possible to prevent those ships from firing their missiles.

In such a scenario, both sides would need to quickly get their damaged ships back into play—repaired, ready to re-enter combat and able to use their firepower. The U.S. would struggle to ramp-up shipbuilding and repair facilities midwar, not least because modern shipyard workers need to be trained.

China would have no such troubles. Its advantage is visible on an island near Shanghai, at the mouth of the river Yangtze. Two immense shipyards are now located on the island, known as Changxing, concentrating a great deal of ship-making power in one place.

Changxing Island is being transformed into a colossal “shipbuilding base,” wrote the Center for Strategic and International Studies in a May report. The buildup started with the relocation of the Jiangnan shipyard to the island from central Shanghai through the years 2005 to 2008. That was followed by the transfer of a second shipyard, Hudong Zhonghua, which is still under way.

Changxing Island shipbuilding base


The shipyards belong to subsidiaries of China State Shipbuilding Corp., a state-owned behemoth whose clients range from the Chinese navy to foreign shipping lines. French shipping giant CMA CGM last year signed a $3 billion deal with it for 16 containerships, after ordering 22 vessels two years before that. Taiwanese shipping company Evergreen Marine also sends large contracts its way.

Satellite images from May obtained from Maxar Technologies show Jiangnan’s vast facility. Around two dozen ships are visible at the busy yard. Some are new; others appear to be in for refurbishment or repairs. There are what appear to be containerships, destroyers and China’s third aircraft carrier, known as the Type 003.

“Where we used to see some levels of division between the commercial side of things and the military side of things, those lines have just become increasingly blurred,” said Matthew Funaiole, a senior fellow of the China Power Project at CSIS, who closely follows developments in Chinese shipbuilding.

Satellite images of Jiangnan analyzed by CSIS in recent years captured an Evergreen vessel docked alongside three Chinese warships and, in another instance, the identifiable green of an Evergreen hull next to the Chinese aircraft carrier. A dry dock used for the carrier was earlier occupied by a containership being built for CMA CGM, the CSIS analysis showed, suggesting that resources were being shared between the commercial and military side of operations.


Chinese survey ship at the original site of the Jiangnan shipyard in Shanghai in 2023. 

When foreign companies pay the Chinese shipyard, a portion of those proceeds is very likely reinvested in the shipyard, said Funaiole. “If the piers and dry docks and assembly halls that are being invested in are also the piers and dry docks and assembly halls that are used to produce military vessels, how do you write that?”

To Shugart at the Center for a New American Security, this is the upshot: “All these countries that are buying ships from China are paying them to build the shipyards they would need to repair their fleet in wartime,” he said, adding, “It’s kind of hard to watch.”

CMA CGM didn’t respond to a request for comment. Evergreen said that its vessels were being built by the commercial department of China State Shipbuilding Corp., which it said was separate from the company’s military department. Evergreen’s shipbuilding contracts are of a purely civil commercial nature, it said.

China’s navy fields 370 battle force ships, more than the U.S. Navy. That number is expected to rise to 435 by 2030. Its shipyards are building increasingly sophisticated warships, such as the large and well-equipped Renhai-class surface combatant. They have also built the world’s largest coast guard and fishing fleets, and an extensive merchant marine—adding to China’s sea power.

The U.S. Navy is expected, meanwhile, to stay the same size or get smaller in the next several years from the present 292 hulls, retiring more ships than it commissions, before it starts to grow again. The logistics support and sealift fleet that helps the military is aging.

The U.S. Navy has superior platforms than China’s, such as a large number of aircraft carriers. But naval strategists increasingly argue that fleet size also matters—the bigger, the better.

Carlos Del Toro, the U.S. Navy secretary, says he is looking hard at shipbuilding. He has directed a review of the causes of U.S. shipbuilding problems and is seeking recommendations for a shipbuilding industrial base “that provides combat capabilities that our warfighters need, on a schedule that is relevant,” according to the Navy.

In October, he visited a privately-owned shipyard not far from San Francisco. The area was home to one of the busiest naval shipyards during World War II—a symbol of the glory days of U.S. shipbuilding, much like Changxing Island is of China’s shipbuilding might today. Mare Island Naval Shipyard built 17 nuclear-powered submarines in the decades after the war before it was closed down in the mid-90s.

“History demonstrates a clear pattern: No great naval power has ever existed without also being a dominant commercial maritime power, encompassing both shipbuilding and global shipping,” Del Toro said late last year.

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