In the first half of 2026, more than four-fifths of the merchant-ship tonnage ordered anywhere in the world went to Chinese yards. By deadweight tonnage, China’s Ministry of Industry and Information Technology put the country’s share of new orders at 82.3 per cent, its share of completions at 62.2 per cent and its share of the global order book at 71.2 per cent. Clarksons Research, the industry’s standard data source, uses a measure that weights complex ships more heavily and gives somewhat lower figures, but the picture is the same. Thirty years ago China built a single-digit share of the world’s ships. Today it builds more than South Korea, Japan, Europe and the United States combined, and its lead grew again in 2026, despite American port fees aimed at Chinese-built ships. This article looks at how big the lead is, how it was built, where the yards are, how far China has moved into demanding ship types, what it means for navies, and what South Korea, Japan, the United States, Europe and India are doing to compete.
The longer history was covered on huaxia.click in September in How China Came to Dominate Shipbuilding, and the navy in How China Built the World’s Largest Navy. This piece concentrates on the race as it stands in autumn 2026.
Measuring the Lead
Shipbuilding can be measured in several units, and the choice matters. Deadweight tonnage (dwt) is carrying capacity, so it favours big, simple bulk carriers and tankers. Gross tonnage (GT) measures enclosed volume. Compensated gross tonnage (CGT) adjusts GT for the work involved, so a cruise ship or LNG carrier counts for far more per tonne than an ore carrier. China is strongest in large cargo ships, which makes its share highest by dwt and lowest by CGT. The gap between the two shows roughly how far it still trails in complex ships.
China’s official figures for 2025 show completions of 53.69 million dwt (56.1 per cent of the world total), new orders of 107.82 million dwt (69.0 per cent) and an order book of 274.42 million dwt (66.8 per cent). That made it the sixteenth consecutive year in which China led on all three measures. Six Chinese companies appeared in each global top ten, and CCTV reported that Chinese yards led in 16 of 18 main ship types. Measured in CGT, the China Association of the National Shipbuilding Industry (CANSI) gives China 50.3 per cent of completions, 63.0 per cent of new orders and 59.4 per cent of the order book.
Independent figures are close, though not identical. According to Clarksons’ monthly data, as reported by the trade press, global orders in 2025 came to 56.43 million CGT, 27 per cent lower than in 2024. China won 35.37 million CGT (1,421 ships, or 63 per cent) and South Korea 11.60 million CGT (21 per cent). The annual results of Clarksons’ parent company give about 58 million CGT, worth around US$186 billion, with China winning “around two-thirds”. On the monthly figures, China held 62 per cent of the end-2025 order book and Korea 20 per cent. That is slightly above CANSI’s figure, a difference that probably comes from how and when ships are counted. UNCTAD’s Review of Maritime Transport 2025, which also draws on Clarksons, gives 2024 completions by gross tonnage as China 54.6 per cent, Korea 28.0 per cent and Japan 12.6 per cent. Its data hub says those three countries built 91 per cent of the gross tonnage completed in 2025.
China took about half of world orders in 2021 and about 70 per cent in the record year of 2024. In 2025 its share dipped. Clarksons put this partly down to “unprecedented challenges from non-market factors”, mainly the threat of US port fees. The dip did not last. In the first quarter of 2026, BIMCO, the shipowners’ association, reported that China took 70 per cent of contracts, Korea 20 per cent and Japan 1 per cent, Japan’s lowest share since at least 1996. By the end of August, Clarksons counted 59.72 million CGT of orders for the year, 60.6 per cent more than a year earlier. China accounted for 76.0 per cent and Korea for 15.7 per cent, and in August alone China took 85.4 per cent. China’s share of the global order book, then 216.43 million CGT, had risen from 61.3 to 67.2 per cent in a year.
Tankers drove much of the 2026 surge. BIMCO reported that tanker orders tripled in the first quarter, against a background of uncertainty over sailings through the Red Sea and the Strait of Hormuz. Korean newspapers link the rush to this year’s conflict involving Iran and note that Chinese yards won most of it on price and delivery slots. Prices have risen too: the Clarksons Newbuilding Price Index stood at 184.65 in December 2025, 47 per cent higher than five years earlier. BIMCO calculates that the global order book equals 17 per cent of the existing fleet, the highest ratio since 2011.
How China Got Here
The modern industry dates from 1982, when Beijing merged almost all of its shipbuilding into the China State Shipbuilding Corporation (CSSC). It began with 26 shipyards and about 300,000 workers, at a time when China ranked only 16th among ship exporters. The domestic market gave little protection: in 1982 and 1983 more than 90 per cent of orders from COSCO, the national shipping line, went to foreign yards. So CSSC pursued export orders, accepted foreign designs and equipment, and brought in Mitsubishi to advise at Jiangnan in Shanghai and British firms at Dalian and in Guangdong. In 1999 CSSC was split in two, and joint ventures with foreign builders were encouraged, with foreign stakes generally capped at 49 per cent and obligations to transfer technology. One example was NACKS, a joint venture between COSCO and Kawasaki Heavy Industries.
The real expansion came after 2000. Shipbuilding was named a key industry, and in 2002 Premier Zhu Rongji set the goal of making China the world’s largest shipbuilder by 2015. The economists Panle Jia Barwick, Myrto Kalouptsidi and Nahim Bin Zahur estimate that China spent about US$91 billion on subsidies between 2006 and 2013. About 69 per cent went on helping new yards enter the industry, through cheap coastal land and easy licensing, 25 per cent on production and 6 per cent on investment. Between 2006 and 2008 more than 30 new yards a year were built in China, against roughly one a year in each of Japan and Korea. China’s share of orders rose from 14 per cent in 2003 to 53 per cent in 2009. It passed Japan in completed tonnage in 2009 and Korea in 2010.
The same researchers are doubtful about the payoff. By their estimate, each dollar of subsidy returned only about 18 cents in extra profit, and the entry subsidies in particular produced many small, inefficient yards. After the 2008 crash Beijing stopped approving new yards and directed support to a “white list” of stronger firms, which their model suggests worked better. They also point to benefits outside the shipyards: cheaper freight, more trade, and growth at yards that also build warships. The wider pattern is discussed in an earlier article on China’s excess capacity since 2008.
Consolidation then reached the top. In November 2019 CSSC and CSIC, the northern group created in the 1999 split, were merged again into the China State Shipbuilding Corporation, which at the time had more than 300,000 employees and about a fifth of the world market. Their main listed companies followed in September 2025, when China CSSC Holdings completed a share-swap takeover of China Shipbuilding Industry Company. The combined listed group has assets of more than 400 billion yuan.
Beside the state group there is now a large private sector. As early as 2012, only eight of China’s twenty largest yards belonged to CSSC or CSIC. The private builders include Jiangsu Yangzijiang, which is listed in Singapore, New Times on the lower Yangtze, and the fastest-growing of all, Hengli Heavy Industry, which took over the former STX yard on Changxing Island near Dalian. In the first half of 2026 Hengli signed 207 contracts: 94 tankers, 56 container ships, 49 bulk carriers and its first eight very large ammonia carriers. Seatrade Maritime reports that it has more than 500 ships contracted in total, with deliveries running to 2030.
Behind the yards are inputs that rivals cannot easily match. China made 960.8 million tonnes of crude steel in 2025, 52 per cent of the world total, according to the World Steel Association. Many of its plate mills are close to the coastal yards; the largest steelmaker is the subject of Baowu and the Making of China’s Steel Industry. China also has deep supply chains for engines, cranes and ship blocks, many large dry docks, and a workforce used to building ships in series. UNCTAD counts about 120 active Chinese yards with around 45 per cent of world capacity. Demand from China’s own trade helps as well, as the article on Chinese ports and their TEU rankings shows.
The Yards and the Clusters
The industry is concentrated in three coastal regions. The largest is the Yangtze delta. Jiangnan Shipyard, which traces its origins to the Jiangnan Arsenal of 1865, moved to Changxing Island at the river mouth to make room for Expo 2010. It now builds container ships, gas carriers and warships along one long waterfront under red gantry cranes. Hudong-Zhonghua is China’s most experienced builder of LNG carriers, and Shanghai Waigaoqiao builds very large tankers, bulk carriers and now cruise ships. Upriver in Jiangsu, and south around Zhoushan in Zhejiang, are many private and provincial yards, including Yangzijiang, New Times and China Merchants Heavy Industry at Haimen.
The second region is the Bohai, centred on Dalian, where a shipyard was first built by the Russians in 1898. Dalian Shipbuilding Industry Company, now part of CSSC, completed China’s first two aircraft carriers and also builds large tankers and container ships, and Hengli’s yard is close by. The third region is the Pearl River delta, where CSSC’s Guangzhou Shipyard International and other yards build ro-ro ships, ferries and tankers.
Moving Upmarket
China used to be seen as a builder of bulk carriers and tankers sold on price, and that view is now out of date. In 2025, Clarksons data showed Chinese yards leading in orders for bulk carriers, tankers and container ships, in a record year for container ships when 4.8 million TEU of capacity was ordered. Gas carriers were the exception, where Korea led.
LNG carriers are the clearest test. They carry gas chilled to minus 162°C, usually in membrane tanks built under licence from the French firm GTT, and Korea’s three big yards have built more than 70 per cent of those now in service. China’s first large LNG carrier, the Dapeng Sun, was delivered by Hudong-Zhonghua in April 2008. The yard has since delivered almost 70, including a national record of nine in 2025. Five Chinese yards now build large LNG carriers: Hudong-Zhonghua, Jiangnan, Dalian, China Merchants Haimen and Yangzijiang. Hengli, which signed a GTT licence in early 2025, is expected to become the sixth.
The figures for China’s LNG market share vary from year to year and between sources. Clarksons data cited by Korea’s MoneyToday put China at 42.8 per cent of LNG carrier orders in 2024 and just 8.1 per cent in 2025, when the threat of US fees deterred buyers. For 2026 up to 18 September the same data show 66 orders, with Korea taking 61.2 per cent and China 38.8 per cent. Besson Nautical, another data provider, counted 90 LNG carriers of all sizes ordered in the first half of 2026, 57.8 per cent of them in China. The difference is partly because Besson counts small and medium ships. Korea still leads in large LNG carriers, but China’s share is no longer marginal.
Cruise ships are an even harder test. On 4 November 2023 Shanghai Waigaoqiao delivered the Adora Magic City, China’s first domestically built large cruise ship. It is 323.6 metres long and 135,500 gross tons, with 2,125 cabins and room for 5,246 passengers. Building it took five years and involved 361 first-tier suppliers and more than 5,000 engineers and technicians from 30 countries. Its sister, the Adora Flora City, completed its sea trials in a single 12-day voyage in May 2026, where the first ship had needed two. It is due for delivery on 6 November 2026 and will sail from Guangzhou’s Nansha cruise port. Two ships do not yet make China a serious competitor for European cruise yards, but they show it can build them.
Fuel is the third test. Clarksons reports that about a third of the tonnage ordered in 2025 could run on alternative fuels, mostly LNG, with methanol and ammonia also appearing. With international rules on future fuels still unsettled, owners are hedging, and Chinese yards with spare slots can offer dual-fuel versions of standard designs. Some limits remain. Key licences, including LNG containment systems and many engine designs, are still held in Europe, Japan or Korea. The gap between China’s 2025 order share by CGT (63 per cent) and by dwt (69 per cent) reflects how much complex work it still leaves to others.
The Naval Dimension
In China the line between commercial and naval yards is thin. On Changxing Island, Jiangnan builds container ships and LNG carriers on the same waterfront where it built the aircraft carrier Fujian. The carrier was launched in June 2022 and commissioned at Sanya on 5 November 2025. It is China’s first carrier with electromagnetic catapults, which makes China the second navy after the US to operate them. Dalian, which converted the former Soviet Varyag into the Liaoning and built the Shandong, is reported to be working on a fourth carrier.
A US Office of Naval Intelligence slide, made public in 2023, estimated China’s shipbuilding capacity at about 23.25 million gross tons a year, compared with less than 100,000 for the United States. It counted more than 50 Chinese dry docks big enough for an aircraft carrier. It gave China 355 battle force ships in 2020 against 296 for the US Navy, and projected 475 against 305 to 317 by 2035. The Congressional Research Service cautions that the gap in capacity for complex warships “may be far less” than the headline ratio. It now counts more than 370 Chinese ships and submarines, while the US Navy has fewer than 300 battle force ships. The ships differ greatly in size and type, so the counts tell only part of the story. Still, the overlap between commercial and naval yards is why Washington now treats commercial shipbuilding as a security issue. China’s seapower has deep roots, as the article on Zheng He’s fleets recalls, but the scale of today’s industrial base is new.
South Korea: Higher Value, Fewer Hulls
South Korea, the world leader in the 2000s, is still the only close rival in complex ships. It has three main groups: HD Hyundai, centred on Ulsan, and Samsung Heavy Industries and Hanwha Ocean (formerly Daewoo Shipbuilding & Marine Engineering), both on Geoje island. Their strategy is to leave the cheap end of the market and focus on LNG carriers, large container ships, ammonia carriers and naval work. In 2025 Korea won 8 per cent more CGT than in 2024 even though world orders fell. Its yards are reported to be largely full until 2029–2030 and are passing some work to yards in Vietnam and the Philippines.
The weakness is volume. Korea’s share of world orders fell from about a third in 2021 to about a seventh in 2024, and stood at 15.7 per cent in the first eight months of 2026. Full order books keep prices up, but they also push owners who need earlier delivery towards China.
Korea has tied its industry closely to American policy. Under its 2025 trade deal with the United States, confirmed in a joint fact sheet in November, Korea committed US$150 billion to American shipbuilding within a wider US$350 billion investment package, and the US cut its tariff on Korean goods to 15 per cent. The two sides set up a shipbuilding working group, and the fact sheet raised the “potential construction of U.S. vessels in the ROK”. Washington also approved Korea building nuclear-powered attack submarines. A Korea–US Shipbuilding Partnership Center opened in Washington on 23 July 2026, with 15 memorandums signed and 120 billion won of joint research planned over five years under the programme known as MASGA, “Make American Shipbuilding Great Again”.
The most concrete result so far is in Philadelphia. Hanwha bought the Philly Shipyard in 2024 for US$100 million. In August 2025 it announced a US$5 billion plan to add two docks and three quays and to raise output from fewer than two ships a year to as many as 20. Beijing sanctioned five US-linked Hanwha Ocean subsidiaries, including Philly, in October 2025, and then suspended the sanctions for a year from 10 November 2025 as part of the US–China truce.
Japan: A Former Leader’s Revival Plan
Japan led world shipbuilding from after the Second World War until the 1980s, and was still a solid third into the 2020s. Its yards completed 12.6 per cent of world gross tonnage in 2024, according to UNCTAD. But they took only 1 per cent of new orders in early 2026, which BIMCO attributed to limited capacity, long lead times and weaker competitiveness. Japan stopped building LNG carriers after 2019, and intends to resume.
Its response combines consolidation with public money. Imabari Shipbuilding, the largest Japanese builder, raised its stake in Japan Marine United from 30 to 60 per cent in January 2026, with JFE and IHI keeping 20 per cent each. In August 2026 government and industry published a road map to double output by 2035 from the 2024 level, backed by about ¥1 trillion of public and private investment and a stated emphasis on next-generation vessels. Japan also appears in Washington’s plans as one of two Asian partners for rebuilding American capacity.
The United States: Fees, Funds and Partners
The White House’s maritime action plan of February 2026 states that the United States builds “less than one percent” of the world’s new commercial ships. It counts eight active shipbuilding yards and 11 more with building positions. The plan builds on an executive order of April 2025 on restoring American maritime dominance and says the US will work with Korea and Japan.
The sharpest measure came from the US Trade Representative. Following a Section 301 investigation brought by American unions, USTR imposed port fees from 14 October 2025. Ships operated or owned by Chinese companies were to pay US$50 per net ton per US voyage. Chinese-built ships run by non-Chinese operators were to pay the higher of US$18 per net ton or US$120 per container. Both rates were set to rise each year, with a ship charged no more than five times a year. Foreign-built vehicle carriers faced a separate regime. China replied with a fee of 400 yuan per net ton on US-linked ships.
After President Trump and President Xi Jinping met in Busan at the end of October 2025, USTR suspended the shipping measures from 10 November 2025 to 9 November 2026, and China suspended its countermeasures for the same period. On 23 September 2026, ahead of Xi’s visit to Washington, Treasury Secretary Scott Bessent said the truce would run until 10 January 2027. But as of 28 September FreightWaves reported that no notice had formally extended the pause on ship fees, which means they are due to return on 10 November unless one is issued. More than 200 industry stakeholders have asked for an extension.
Funding is moving slowly. The SHIPS for America Act stalled as a standalone bill. Its core provisions, including a US$20 billion Maritime Security Trust Fund and a 100 per cent cargo-preference rule, according to GovConFeed, were added to the House’s 2027 defence authorisation bill, which passed by 216 votes to 212 in July 2026 and still has to be agreed with the Senate. Meanwhile the most visible commercial expansion in the US, at Philadelphia, is Korean-owned. The White House plan even commits Washington to “consult with China on shipbuilding capacity”.
Europe: The Cruise Stronghold
Europe gave up large cargo ships long ago but still dominates cruise ships, and UNCTAD names Finland, France and Italy as the leading builders. Italy’s Fincantieri reported a backlog of €73.9 billion at the end of June 2026, covering 92 ships with deliveries scheduled until 2039. It took a Princess Cruises order in April 2026, expects to deliver a hydrogen-equipped cruise ship by the end of the year, and in its half-year report said it had sold its stake in the cruise joint venture with CSSC. France’s Chantiers de l’Atlantique at Saint-Nazaire won four MSC ships in 2025, including a €3.5 billion order for two more World Class ships due in 2030 and 2031.
Germany’s Meyer Werft shows the weak point of the model. Cruise ships are mostly paid for on delivery, about 80 per cent of the price in Meyer’s case, so builders have to finance years of construction themselves. When Meyer ran short of money in 2024, the federal government and Lower Saxony took about 80 per cent of the company for €400 million and provided guarantees of about €1 billion each, with an order book then worth about €11 billion running to 2031. The European Commission approved the rescue in December 2024. Europe’s yards are full, but space, labour and financing limit how much they can expand.
India and Others
India is the newest entrant. In September 2025 its cabinet approved a ₹69,725 crore package, made up of a ₹24,736 crore shipbuilding subsidy scheme running to 2036, a ₹25,000 crore Maritime Development Fund and a ₹19,989 crore scheme for shipyard clusters. The targets are 4.5 million gross tons of annual capacity, about 3 million jobs, and a place among the world’s top five shipbuilding nations by 2047. From a very small base, that will depend heavily on foreign partners. Elsewhere, Vietnam and the Philippines take overflow work from Korean groups, and UNCTAD notes that Russia plans to build more than 1,600 ships at home by 2036. Turkey, Norway and the Netherlands keep profitable niches in specialist vessels that barely register in tonnage tables.
Outlook
On current figures, China’s lead is still growing. By mid-2026 it held about two-thirds of the global order book by CGT and more than 70 per cent by dwt, and CANSI expects Chinese completions to exceed 60 million dwt this year. Korea is holding on in high-value ships but losing volume. Japan has a ten-year recovery plan, the United States is rebuilding largely with Korean money, Europe keeps its cruise niche, and India is starting from a low base.
Four things could shift the picture. The first is the US port fees: whether they return on 10 November, are suspended to January, or disappear in a broader settlement. The dip in 2025 showed that buyers do respond to that risk. The second is the shipping cycle. BIMCO warns that large order books, high prices and long lead times could slow ordering, and fast-built capacity is vulnerable in a downturn, as 2008 showed. The third is technology: if future fuels favour designs whose key licences sit in Korea or Europe, the CGT gap will matter more. The fourth is cost, as China’s shipyard workforce ages and wages rise.
For now, the advantages lie with China: the most docks, the most steel, the deepest supply chains and the largest order book, together with the cruise ships and LNG carriers that show it can do complex work too. Its rivals’ plans would add a few million tonnes of capacity over a decade. Chinese yards already deliver more than fifty million tonnes a year.
References
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