China has announced the completed merger of China Shipbuilding Industry Corporation (CSIC) and China State Shipbuilding Corporation Limited (CSSC) on November 26.
The reorganized corporation, the new China State Shipbuilding Corporation, creates the world’s largest shipbuilding group, according to local media. It has 147 scientific research institutes, enterprises and listed companies with total assets of CNY790 billion (about US$112.29 billion) and 310,000 employees, reported Xinhua News.
Last month, China’s State Council approved the merger between the two.
The new group has the largest shipbuilding and repairing base in China and the most complete research and development capability in the field of shipping, allowing its marine equipment to meet the requirements of international technical standards and safety conventions, said the Xinhua report.
The move is said to be part of China’s streamlining efforts amidst rising debt in a bid to make the industry more profitable and responsive to market forces.
While China’s shipbuilding industry has rapidly strengthened in recent years, compared with the world-class shipbuilding powerhouses, the country’s research and manufacturing capabilities in the field of high-tech and high value-added ships are insufficient, while the industry has excess manufacturing capacity.
This reorganization will help speed up the elimination of low-end backward production capacity and optimize the industrial structure of China’s shipbuilding industry, said Hao Peng, director of state-owned Assets Supervision and Administration Commission of the State Council.
He said the move is also conducive to accelerating China’s high-tech and high-value-added research and manufacturing capability, which can improve the strength of its shipbuilding industry and international competitiveness.
In a changing international shipping industry with slowing global trade growth, the transformation and upgrading of China’s shipbuilding industry are imperative, according to industry analysis.
The Chinese shipbuilding industry is competing with those of South Korea and Japan.
Photo by Drew Bates