China’s shipbuilding dominance unlikely to shift soon, despite market share drop

Challenges such as labour shortages in key rival countries and the limited capacity of alternative shipyards reinforce China’s dominance for now.

Although China’s share of global orders declined in the first half of 2025, the drop was primarily driven by a broader slowdown in ship contracting and a shift in vessel types being ordered, with the proposed US port fees on Chinese-built ships also playing a role, though to a lesser extent.

“Even if shipowners seek to avoid ordering vessels in China due to USTR fees, there is a limit to the capacity available outside of the country,” said BIMCO shipping analysis manager Filipe Gouveia. “If global contracting hadn’t slowed significantly at the start of the year, China’s share would have likely been larger.”

Competitors struggle with capacity constraints

According to BIMCO, South Korea and Japan – the world’s second and third-largest shipbuilding nations – face significant challenges in expanding their production. Both countries are experiencing labour shortages due to declining populations, which has led to rising labour costs and reduced competitiveness, the report noted.

While China is expected to maintain its leading position in the near term, it may face growing competition over the medium term. “Countries like the Philippines and Vietnam, already minor producers of bulkers and tankers, could scale up output by leveraging lower labour costs,” Mr Gouveia said.

Government-led efforts to build shipbuilding capacity are also underway in the US and India. However, Mr Gouveia cautioned “even if these initiatives succeed, it will take time to scale up production meaningfully.”

Contracting volumes plummet

Global newbuilding contracting fell by 54% year-on-year in the first half of 2025, measured in compensated gross tonnage, according to BIMCO. Analysts observed a significant slowdown in ordering for bulk carriers, tankers and gas carriers, largely due to weaker freight rates. In contrast, container vessels and cruise ships were the only major segments where contracting activity increased.

China’s share of global contracting dropped from 72% in the first half of 2024 to 52% during the same period in 2025. “Concerns about USTR port fees on Chinese ships in US ports may have contributed to the decline,” Mr Gouveia said. “This trend was further amplified by a drop in global ship contracting and a shift in the types of ships being ordered.”

Despite this drop, China maintains a leading position in the global shipbuilding industry, with the exception of the cruise ship sector. Chinese shipbuilders led all segments in 2025, except for gas carriers – consistent with 2024 trends – and crude tankers, where South Korea took the lead.

Delivery timeline extends

Tight shipbuilding capacity has already resulted in lengthy orderbooks, especially for large vessels such as container ships, gas carriers and cruise ships. BIMCO data shows that of the contracts signed in 2025 so far, 31% are scheduled for delivery in 2027, 38% in 2028, and 23% beyond that.