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Shanghai Dreams Big in Shipbuilding
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Shipbuilding is undergoing an unprecedented growth in the birthplace of the industry in China because the city wants to become the largest such base in the world.


In the middle of January, the Shanghai Shipyard Corporation completed a 3,500-TEU (20-foot equivalent unit) container vessel, North-Philippa, at its new dock on Chongming Island. The ship, already delivered to the German buyer, is the biggest container vessel built on the mainland under an intellectual property right.


The shipyard will build 36 more such ships by 2009. After shifting to Chongming, the shipyard is expected to raise its annual output capacity of 1 million deadweight tons (DWTs).


"We're confident about our competence in building large container ships or bulk cargo ships for buyers across the world. We've enough orders for the next few years, and the same applies to many other shipyards in the city," a source in the shipyard management, surnamed Qian, said yesterday.


Shanghai reportedly has 19 large and medium-sized shipbuilders along the Huangpu River and the Yangtze River estuary. In the past year, the city has built ships that add up to a record 5 million DWT, accounting for more than one-third of the country's total production.


Shanghai Waigaoqiao Shipbuilding Corporation (SWSC) alone had a 311.5-DWT total in 2006, a rise of 44 percent over the previous year. The shipyard, still undergoing expansion, has orders for about 80 ships now that are worth more than US$5 billion.


He Baoxing, an official from SWSC, said the second phase of the shipyard would be completed this year.


Many local shipbuilding companies, most of them State-owned, have aggressive expansion plans like SWSC. Some of them along the Huangpu River are now shifting base to the Changxing and Chongming islands on the mouth of the Yangtze so that they can build even bigger ships and increase their production capacity.


The largest shipyard of the world is already in construction on Changxing Island, about 7 kilometers away from the mainland. It will occupy a stretch of 8 kilometers on the southern part of the island and is expected to be fully operational by 2015. Its annual production capacity would be 12 million DWTs, more than double the city's total output last year.


The Changxing shipyard's first-phase, including four docks on the 3.4-kilometer coastline, is scheduled for completion by 2008.


It will then be home to the over 140-year-old Jiangnan Shipyard, the oldest existing shipbuilder in China. After shifting to Changxing, it will be twice its present size, and have an annual production capacity of 4.5 million DWTs in 2010, company official Zeng Ming said.


"Local shipyards' expansion on the two islands will surely raise the city's total production, and the growth in the shipbuilding industry will help stimulate other industries, such as machinery and electronics," said Yang Qi, professor of Shanghai Jiaotong University's School of Naval Architecture, Ocean and Civil Engineering.


The international shipbuilding base has gradually shifted from Europe to East Asia, because of lower management and labor costs.


China's total ship production touched 14.52 million DWTs last year, or 20 percent of the global production, Xinhua said. That made the country the biggest shipbuilding base in the world after South Korea and Japan. And some experts say China could overtake the two countries by 2015.


"The gap between China and the top two is shortening as Chinese shipbuilders keep improving their management and technologies. The Changxing project will be a big shot in the arm." Yang said. "And Shanghai will continue to lead the domestic shipbuilding industry because it is home to the major shipyards."


(China Daily February 2, 2007)


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