Chinese shipbuilding industries are standing on the edge of the precipice, suffering from plummeted new order and financial difficulties.
Chinese shipbuilders' overall new order contracted for the first six months of this year was cut by over a half and their orderbook, at present, declined by 35% year-on-year.
Local sources reported that the number of China's operating shipyards which reached around 3,400 in 2008 now fell to some 300.
Dongfang Shipbuilding, the first Chinese shipyard listed on London's AIM in August 2011, was delisted and banks are rushing to seize its assets.
China's largest private-owned shipyard Rongsheng Heavy Industries is also encountering financial difficulty.
China has seen many cases of curtailment of production, filing for insolvencies, etc., from shipbuilding-concentrated areas, such as Jiangsu, Zhejiang, Shandong, etc.
Bluesky Shipyard and Hengfu Shipyard went bankruptcies in October 2011, while Huigang Shipyard and Zhejiang Jingang Shipbuilding filed for insolvency in March and May 2012, respectively. In June, Dalian Oriental Precision & Engineering declared bankruptcy.
Shipbuilding official said, "Shipyards in Shanghai have already went through several restructuring, however, they are facing crisis of operation stop, insolvency, etc."
Sharp increase in labor costs, low management efficiency, etc., have considerably affected recent difficulties, not to mention European financial crisis, appreciation of Yuan, etc.
An official from CANSI pointed out, "The biggest problems are low order and financial difficulties. Also, structural problem of high proportion of small-and-medium shipyards, reaching 60% is problematic."