The State Council recently issued a plan to accelerate restructuring and technological upgrading within China's shipbuilding industry. In 2010, China led the world in terms of shipbuilding volume. But the same cannot be said about the country's ship construction technology or the competitive strengths of its shipyards. Over the years, Chinese shipbuilding has expanded too quickly through repeated investment and the industry is now waterlogged with excessive capacity. This is true across the nautical construction sector - makers of low-end bulk carriers and high-end tankers all face similar predicaments.
A persistent downturn in the global shipping market hasn't helped matters either. With few signs of relief on the horizon, it is critical to establish a stable, sustainable and orderly ship making environment. After all, Chinese shipyards are major buyers of industrial products such as steel, iron and heavy machinery. They also supply vital assets to several of the country's largest industries, including offshore oil and gas producers.