Overcapacity in the shipbuilding industry is most evident in China where many small to medium sized private yards have, until recently, offered cheap alternatives to the superior quality of vessels built in neighbouring Japan and South Korea. According to the China Association of the National Shipbuilding Industry (CANSI) the country has some 1,647 yards which had some US$3 billion worth of orders on their books in the first half of 2013, about two thirds of the total for the previous year, but some analysts expect more than 30% of these yards could close over the next few years. Low cost labour, a global economic boom and a shipbuilding boom to match in the early part of the 21st century combined to encourage the development of a highly fragmented, inefficient and, in parts, antiquated shipbuilding industry.
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