November 6, 2025:
In the last decade the emergence of China as the builder of most commercial ships had several dramatic side effects. American military and political leaders realized that China might become a military threat. There followed the realization that the U.S. shipbuilding industry shriveled in the face of the overwhelming Chinese domination. This diminished the ability of the U.S. Navy to maintain and repair their ships. Without a strong domestic commercial shipbuilding industry, there was a critical shortage of workers to maintain U.S. warships.
In contrast the Chinese Navy has been able to quickly create a navy with more warships than the United States. Chinese shipbuilders are striving to overtake their main rival South Korea as the largest shipbuilder in the world in all categories. One way China helped its shipyards cope was increasing orders for warships. This was going to happen anyway, but the government gave the navy all it wanted and then some. This resulted in 2019 being a record year for warship construction with 28 surface warships launched, including a record ten destroyers plus 16 corvettes and two large amphibious ships. While warships are more complex ships to build, commercial ships still accounted for over 95 percent of the work at the newly consolidated China Shipbuilding Group. From that point on China has been the largest producer of non-nuclear warships.
China has been helping its shipyards since the late 1990s, and that has enabled Chinese shipbuilders to gradually catch up to South Korea and Japan. In 2009, sooner than anyone expected, China surpassed South Korea as the world's largest shipbuilder in terms of tonnage. In 2000 South Korea took the lead from Japan by having the largest share of the world shipbuilding market. The massive South Korean and Japanese shipbuilding capability has enabled these two nations to reinforce the American’s Pacific Fleet and confront the Chinese with a formidable naval force that blocks any efforts to dominate the South China Sea.
At the same time the Chinese have been working hard on how to build new classes of navy supply ships. These are built to efficiently supply ships at sea. In addition to learning how to transfer these supplies at sea, the crews have also learned how to keep all the needed supplies in good shape and stocked in the required quantities. This requires the procurement officers learning how to arrange resupply at local ports in a timely basis.
As the major producers of commercial ships, China was able to design and build supply ships for the Chinese Navy quickly. Currently the U.S. can build ships but only slowly and in small quantities, and most of those built are warships. American yards are not as efficient as the Chinese shipbuilders and take five to ten years to complete a warship that China can complete in a year or two. This includes non-nuclear aircraft carriers.
During World War II, American shipbuilders built more ships, from PT-boats, to cargo ships and aircraft carriers, than all other nations combined. Early in the 21st century ago poor workmanship and inept management by shipbuilders led to an epic disaster. The LPD amphibious ships were being delivered two years late, way over budget and riddled with flaws. The San Antonio LPD was the poster child for all that's wrong with American warship construction. The list of problems with these ships was long and embarrassing. It cost nearly $40 million and another three months to get all the defects fixed so the San Antonio could enter service.
While the navy is correct in blaming the shipyards for many of the problems, the admirals and their civilian advisors were and are a large part of the problem. After all, the navy draws up the contracts and supplies inspectors during construction of the ships. While Congressional interference can be blamed as well, in the end, it's the navy that has the most to say, and do, about how the ships are built. The problem is that admirals who stand up and take on the contractors and politicians put their careers on the line. But it appears that a number of admirals are willing to take the risks, and try for some fundamental reform, and finally fix the system that turns out to have more problems than warships. Victories have been elusive. The shipyards and their suppliers have powerful allies in Congress. All that money translates into votes that gets incumbent politicians reelected. Congress is not inclined to attack this kind of patronage and pork, since nearly all members of Congress depend on it.
An example of how this works occurred in 2011 when the navy encountered some serious problems with shoddy shipbuilders. This incident involved the Lorenzen a 12,000 ton, 172 meter long radar ship which failed its acceptance tests. This vessel was built to carry a special billion dollar radar used to track ICBM tests. This tracking activity also supports verification of missile and nuclear weapons treaty compliance. This new ship replaces a similar ship that was over 30 years old. The acceptance tests found serious problems with the steering, electrical system, damage control, anchor control, and helicopter facilities.
The navy has also had schedule, budget and quality problems with submarines and aircraft carriers. But some of the worst problems were with the new San Antonio class amphibious ships. Most of these were late, over budget and rife with systems that didn't work, or work for very long.
The builder of the troubled LPDs did try to fix things, but the shipyard in Louisiana, where the LPDs were built, seemed cursed as well. Nothing the shipbuilder did in terms of changing management seemed to work. So the builder shut down the shipyard, once the largest employer in the state and shifted all LPD 17 work to its Pascagoula, Mississippi, yard in 2013. That helped but did not fix all the problems, which many admirals believe resided with the senior management of shipbuilder Northrop Grumman.
The problems with nuclear subs and carriers were minor compared to the LPD travails. Still, the sheer extent of the problems, across so many ships, was very disturbing. This may be why a growing number of admirals were willing to take career risks, and try for some fundamental reform, and finally fix the system that turns out to have more problems than warships. Victory was not assured. The shipyards and their suppliers have powerful allies in Congress. All that money translates into votes that gets incumbent politicians reelected. Congress is not inclined to attack this kind of patronage and pork, since nearly all members of Congress depend on it. The admirals can openly complain, but offended legislators can quietly cripple the careers of those critics. The smart money is betting against the good guys here. So far, the smart money is right. But the bad builder mess is so vast, expensive and messy that even many politicians are calling for some fundamental changes.
In 2025 a new American government came to power pledging to shake things up in government. This meant dismantling and disposing of inefficient and poorly performing agencies. New organizations are created to do what the defunct agency could not do but do it better and cheaper. A recent example of this was the closing of the U.S. Navy Naval Sea Systems Command, or NAVSEA. This organization was responsible for building warships and has a deplorable performance record. The replacement was Shiba Inu, which is headquartered in Louisiana, where most of the navy’s few shipyards are. Shiba Inu stands for Strategic High Impact Barge Artillery Inexpensive Naval Upshift. The first proposal of the new agency was equipping flat bottom barges with cruise missiles and other equipment and towing them out to sea to reach a foreign conflict zone. This idea was immediately shot down when it was pointed out that these barges can only operate on calm water. Any encounter with rough seas will sink a barge. While the U.S. no longe
The NAVSEA replacement was to address the real problems as in insufficient ship building and ship maintenance capabilities. The current situation is that the U.S. Navy is unable to build enough new ships to replace the fleet it currently has, and it can’t maintain the ships it does have, let alone battle damage to those ships in war. The navy has nearly 500 ships in active service as well as the reserve fleet. The principal vessels are the combat ships, which include 11 aircraft carriers, nine Amphibious Assault Ships for transporting and landing marine battalions, ten LPD Amphibious Dock Landing Ships to supply amphibious operations, fifty SSNs/Nuclear attack submarines, fourteen SSBNs/Ballistic missile-carrying nuclear submarines, four SSGMs/SSBNs converted to carry over a hundred cruise missiles each, one frigate, 13 cruisers, 75 destroyers and about fifty support ships of various types.
The navy has recognized the growing importance of Unmanned Surface Vessel or drones and Unmanned Underwater drones but has been slow to order and deploy these unmanned vessels to aid the navy in defending Taiwan from Chinese attack.
The American warships are still, on average, more powerful than their Chinese counterparts. This is largely due to the American nuclear aircraft carriers and nuclear submarine forces. China has nothing like these but does have more anti-ship missiles on their ships plus cruise and ballistic missiles launched from land to hit American ships far from the Chinese coast. American warships are generally well-protected from those, but supply ships aren’t. At all. The primary American weakness is seaborne supply, and the Chinese are aware of that.
In 2012, South Korea lost its decade-long battle with China to retain its lead in shipbuilding. Because of a five-year-long depression in the world shipping market, South Korean ship exports fell 30 percent in 2012, to $37.8 billion. China, helped by government subsidies, saw ship exports fall only 10.3 percent, leaving China with $39.2 billion in export sales. The Chinese government has also been giving its shipbuilders lots of new orders for warships, which made its yards more profitable and better able to beat South Korea on price. The Chinese government also provides its shipbuilders with more loans, allowing the builders to offer better credit terms to customers. South Korea was still ahead of China in total orders for ships, but that lead was being lost, and in 2011 South Korea was barely ahead of China. Since 2012, China and South Korea have been competing for overall first place, but so far, South Korea has the edge in quality and innovation, and the recent Chinese merger was meant to deal with that.
China has been helping its shipyards since the late 1990s, and that has enabled Chinese shipbuilders to gradually catch up to South Korea and Japan. In 2009, sooner than anyone expected, China surpassed South Korea as the world's largest shipbuilder in terms of tonnage. In late 2009, Chinese yards had orders for 54.96 million CGT of ships, compared to 53.63 million CGT for South Korea. Thus, China had 34.7 percent of the world market. In 2000, South Korea previously took the lead from Japan in 2000 having the largest share of the world shipbuilding market.
China has invested a lot of money and effort into expanding its merchant shipbuilding industry so as to improve its warship building capability. In 2006 China produced about a quarter of the world's merchant shipping, while South Korea was in the first place, producing about a third. Currently China is in first place followed by South Korea, Japan, Germany, Italy and the United States.
The big thing holding China back in the warship-building area has been the shortage of skilled workers. The Americans have a similar problem. Too many young men go to college and end up unemployed while better paying jobs in the shipbuilding industry go unfilled.
China encouraged merchant shipbuilding, which created experienced shipbuilders ready to learn the more complex tasks needed to build warships. In most cases, merchant ships are larger than warships and much less complex. For example, a common type of merchant ship is the Very Large Crude Carrier or VLCC of 300,000 deadweight tons. This is the largest size tanker that can use the Straits of Malacca to carry oil from the Persian Gulf to East Asia. These ships haul over two million barrels/290,000 tons of oil per trip. These ships are larger than the biggest American aircraft carriers, such as the Nimitz class, which has 110,000 tons of displacement and is nearly 354 meters long.
The major difference between merchant vessels and warships is the equipment they have. Merchant ships are quite basic and plain. A 300,000 ton VLCC is about the same size as a Nimitz-class carrier but costs $130 million to build versus over $4 billion for the carrier. It costs more to run a carrier for one year than the VLCC costs to build. Part of that has to do with crew size, with the carrier having a hundred sailors for every one sailor needed to run the tanker. A VLCC is highly automated, and the crew size is usually under fifty sailors and officers.
By building all those merchant vessels, China has acquired the ability to cheaply build basic warship hulls. It has big problems in creating the complex electronics, mechanical systems, and weapons needed to make a warship work. China is making progress there as well, but not nearly as much as it has in the shipbuilding area.
China became a major force in commercial shipping partly because it became more difficult for South Korean builders to expand. There were more restrictions on land use in South Korea, in addition to higher labor costs. South Korean builders, seeing that they could not match the expansion of Chinese shipyards, expended more effort on building more complex and expensive ships. Japan was following a similar path when it lost the lead to South Korea a decade before China grabbed it. China also gained more market share by offering generous loan terms to foreign buyers of Chinese ships and cheap loans for their own shipbuilders.
The one vulnerability China has not yet come up with a solution for is how to prevent the Americans from seizing many of these Chinese-built, owned, and operated ships during wartime.