China is dominating the global shipping and shipbuilding sectors by using unfair trade practices, according to a US investigation reported by FreightWaves.
Conducted under Section 301 of the Trade Act of unfair practices, the investigation found that China had been targeting specific industries for decades by undercutting competition to achieve dominant market share, the 22 January report said.
The results of the probe, initiated in April 2024, were summarised in a report by the office of the United States Trade Representative (USTR).
“For nearly three decades, China has targeted the maritime, logistics, and shipbuilding sectors for dominance and has employed increasingly aggressive and specific targets in pursuing dominance of the maritime, logistics and shipbuilding sectors,” the report said.
“China has largely achieved its dominance goals, severely disadvantaging US companies, workers and the US economy generally through lessened competition and commercial opportunities and through the creation of economic security risks from dependencies and vulnerabilities.”
According to the report, as well as reducing the competitiveness of the USA and other countries, China’s top-down, centrally controlled strategy was also a threat to national security.
China’s share of the global shipbuilding market had increased from less than 5% in 1999 to more than 50% in 2023, pushing its ownership of the commercial world fleet to over 19% as of January 2024, the report said.
According to the report, China controls 95% of global shipping container production and 86% of the world’s supply of intermodal chassis.
China’s strategy was helped by government policies that unfairly reduced costs or provided advantages, the report said.
The report outlined China’s long-term goals for the scale and structure of industry and increasingly aggressive global market share targets at the expense of foreign companies for shipbuilding, marine equipment, maritime engineering equipment, high-technology ships and shipping.
Taking the high-technology ship sector as an example, China had initially set a target of 20% of global market share by 2011 but now aimed to achieve a 50% share by 2025. In maritime engineering equipment, its initial target of 10% by 2011 had risen to 40% by 2025.
The overall effect of these targets was to push aside foreign competition while increasing risk and reducing supply chain resilience for potential customers that were forced to rely on China, the report said.
The report listed mechanisms used by China, including subsidies, forced technology transfer and intellectual property theft, to reduce competition.
Dominance in the maritime, logistics and shipbuilding sectors had also helped make China a “world-class military” power, with national security implications for the USA, the report said.
