Overview of the Shipbuilding Industry

　　China has risen to become a global powerhouse in the shipbuilding market, with its three key industry indicators—shipbuilding completions, new orders received, and order backlog—all ranking among the world’s top. Supported by government policies aimed at revitalizing demand (such as assisting shipping companies in fleet renewal) and financial incentives, China’s shipbuilding and offshore industries have maintained the world’s largest share of both new orders and order backlogs in recent years. Moving forward, the sector’s objectives include achieving systemic integration to transition from a “large” shipbuilding and offshore nation to a “strong” one, increasing its share of the international offshore equipment market to over 20%, and raising the localization rate of shipbuilding components to more than 80%.

　　According to data from the China Association of the Shipbuilding Industry, from January to May 2018, China’s new ship orders and order backlog continued to grow, the decline in ship completions narrowed, and key economic indicators such as the total industrial output value of monitored enterprises declined year on year.

　　Relevant Report: “Market Monitoring and Industry Investment Strategy Research Report on the Marine Equipment Supply Chain” by Beijing Puhua Youce Information Consulting Co., Ltd.

　　(1) Two of the Three National Shipbuilding Indicators Rise, One Falls

　　From January to May, China’s shipbuilding industry completed 16.43 million deadweight tons of ships, a year-on-year decrease of 28.3%. New ship orders received totaled 19.68 million deadweight tons, up 99.6% year on year. As of the end of May, the order book stood at 89.03 million deadweight tons, representing a year-on-year increase of 7.5% and a 2.1% rise compared with the end of 2017.

　　From January to May, China’s shipbuilding industry completed 15.48 million deadweight tons of export vessels, a year-on-year decrease of 28.2%; secured new export vessel orders totaling 18.34 million deadweight tons, up 108% year on year; and held 80.04 million deadweight tons of export vessel orders at the end of May, an increase of 1.5% year on year. Export vessels accounted for 94.2%, 93.2%, and 89.9% of the nation’s total completed shipbuilding volume, new order intake, and order backlog, respectively.

　　(II) Status of Key Monitoring Indicators for Enterprises

　　1. Three Key Indicators for Shipbuilding Enterprises: Two Up, One Down

　　From January to May, the 53 key shipbuilding enterprises under monitoring completed the construction of 16.08 million deadweight tons of ships, a year-on-year decrease of 17.8%. They secured new ship orders totaling 19.19 million deadweight tons, up 119% year on year. As of the end of May, their order backlog stood at 86.75 million deadweight tons, representing a year-on-year increase of 7.6%.

　　From January to May, the 53 key shipbuilding enterprises under monitoring completed the delivery of export vessels totaling 15.12 million deadweight tons, a year-on-year decrease of 18.7%; they secured new export orders totaling 17.85 million deadweight tons, up 127% year on year; and as of end-May, their order backlog for export vessels stood at 78.08 million deadweight tons, an increase of 4.1% year on year. Export vessels accounted for 94% of the completed output, 93% of the new orders received, and 90% of the order backlog held by these key shipbuilding enterprises.

　　2. Total industrial output value declined year-on-year.

　　From January to May, the 80 key monitored enterprises in the shipbuilding industry recorded a total industrial output value of RMB 131.2 billion, down 11.9% year on year. Specifically, shipbuilding output amounted to RMB 55.6 billion, a decrease of 17% year on year; marine equipment and component output reached RMB 9.5 billion, up 5.6% year on year; and ship repair output totaled RMB 4.4 billion, an increase of 4.8% year on year.

　　3. Ship export output value declined year-on-year

　　From January to May, the 80 key monitored enterprises in the shipbuilding industry recorded export output value of RMB 52 billion, a year-on-year decrease of 12.3%. Specifically, shipbuilding output value totaled RMB 37 billion, down 12.9% year on year; marine equipment and component output value reached RMB 2.2 billion, up 4.8% year on year; and ship repair output value amounted to RMB 3 billion, up 11% year on year.

　　4. Decline in Corporate Economic Performance Compared with the Same Period Last Year

　　From January to May, 80 key monitored enterprises in the shipbuilding industry recorded main-business revenue of RMB 87 billion, a year-on-year decrease of 21%; total profits amounted to RMB 500 million, down 66% from the same period last year.

　　In recent years, despite the profound impact of the global financial crisis—characterized by difficulties in securing new orders, delivering vessels on time, achieving profitability, and obtaining financing—the shipbuilding industry as a whole has experienced a decline in economic performance. Nevertheless, China’s shipbuilding sector has overcome such challenges as the prolonged downturn in the shipping market, volatile low-level conditions in the international shipbuilding market, and severe overcapacity worldwide. As a result, the industry has achieved further increases in concentration, notable progress in transformation and upgrading, breakthroughs in intelligent manufacturing, significant achievements in international cooperation, continued refinement of the industrial value chain, and steady advancement of mergers and reorganizations. Consequently, the sector’s overall strength has been enhanced, and its status as a major global shipbuilding power has been further consolidated.