Independent journal on economy and transport policy
14:11 GMT+1
STUDIES AND RESEARCH
CSIS urges the U.S. government to counter the dual-use civil-military system adopted by Chinese shipyards
There are doubts about the port tax system proposed by the USTR, but not about its introduction which would cost over eight billion dollars a year to the top ten companies calling at US ports
Washington
March 11, 2025
"China's growing dominance in the
Global shipbuilding presents critical challenges to the economy
and national security for the United States and its allies."
The warning is contained in a report published today by the
American think tank Center for Strategic and International Studies
(CSIS) which examines the implications of the astonishing growth
of the Chinese shipbuilding industry which - the document recalls -
Only twenty years ago it was an almost irrelevant player in this market.
The report specifies that this rapid expansion is
made possible by its dual-use shipbuilding model,
i.e. active both in the commercial ship production segment
and military ships. This dual use, according to the CSIS analysis,
represents a critical challenge for the US as it is enabling
to bridge the gap with the US naval forces, so much so that
now the Navy of the People's Republic of China deploys more
US Navy warships and - the report notes - "is
on track to deploy a fleet of 425 ships by
2030, supported by an industrial base that is able to
replace and repair ships much faster than
to US shipyards".
The report points out that, "from an economic point of view,
China's industrial policies are marginalizing
US and allied shipbuilding industries. Japan and Korea
of the South, once dominant, are also losing market share
in advanced sectors such as the production of gas tankers
Natural liquefied European shipbuilders are also facing
increasing competition as China expands into high-tech markets
high value like cruise ships. The shipbuilding sector
U.S. commercial shipping was nearly canceled, with
its market share dropped in 2024 to only 0.11% of the total
global".
The report therefore urges the adoption by the US of
decisive measures to address the challenges posed by Chinese industry
shipbuilding industry, with policies focused on different
objectives starting from the active fight against the "fusion
civil-military" adopted by Chinese shipyards "interrupting
the inflows of foreign capital and technology into the shipyards
and the reduction of the "dominance of China
in the world shipbuilding industry". « Experiences
in sectors such as solar panels and batteries
for electric vehicles, in which US companies and allies
have been almost completely ousted from the market by the
low-cost Chinese production - explains the document - offer
relevant warnings about what can happen without
an intervention. Take measures to limit disproportionate
China's influence will promote economic security not
not only of the United States, but also of key US allies such as the
South Korea and Japan. The erosion of market dominance
will also indirectly support the first objective of
limit Beijing's ability to exploit its industry
commercial shipbuilding to support its modernization
of the military fleet through its merger strategy
civil-military".
In addition, the report urges to "encourage affiliation
to important allies of the United States, namely South Korea
South and Japan, as a counterweight to China." To this end,
In this regard, the document notes that "there is too much demand
and not enough capacity outside China (the
Chinese shipyards currently cover 62% of the portfolio
global orders until 2033). It's just as unrealistic –
the authors of the document note - expect the United States to
become a major player in the market in the short to medium term
global shipbuilding. Also reach a quota of
5% market would require an almost 50-fold increase in the
national production. While the United States can take measures
to increase its industrial capacity - specifies the
report - should also prioritise the
strengthening the competitiveness of South Korea and the
Japan compared to their Chinese counterparts. This represents
the most efficient and viable strategy to expand
alternative market options outside China." The
The document therefore calls for the promotion of the capacity to
U.S. National Shipbuilding in Key Segments for the
national security rather than focusing on competition
direct with China.
The analysis of the American CSIS, which seems to respond to the
expressed by President Donald Trump, also suggests that
introduce a scalable system of port charges to be applied to
shipping companies operating ships built in China on the
along the lines of the system proposed by United States Trade
Representative, "but - the report specifies - with considerable
Changes. The main problem with the USTR proposal -
explains the document - is that it is designed to impose burdens
on the purchase of any Chinese-made vessel. It does not
distinctions between which Chinese ships are purchased. Of
consequently, the regime only achieves economic objectives".
According to the CSIS report, "a better-designed proposal
could achieve the same economic objectives and at the same time
achieve key objectives for national security".
"Also taking into consideration a limited sample of the types of
activities affected by the USTR proposal - continues the
report - reveal the far-reaching impacts that could
on the maritime transport and shipbuilding sectors
naval ». Referring to the top ten ship operators
container ships serving U.S. ports and relying on
only on the share of Chinese-built ships in their fleet, the
The report notes that "at a minimum, the taxes assessed on these
ten companies, which collectively account for around 70% of the
container ship traffic in U.S. ports,
would amount to over eight billion dollars a year". The
In fact, the report specifies that, on the basis of the stopovers made in the
US ports in 2019-2024 and the share of ships built in
China as part of its fleet, MSC, which is the operator
world market leader, would have to pay port fees on the
basis of the USTR's proposal of $2.00 billion
per year; Maersk would pay annual taxes of 1.24 billion, the
CMA CGM of 1.30 billion, Hapag-Lloyd of 702 million, ONE of
921 million, the Chinese COSCO at 650 million, Evergreen at 297
the US Seaboard Marine at 458 million, the ZIM at 331 million
million and China's OOCL at $276 million. The report
therefore recommends that, "instead of assigning docking fees
based only on the share of total Chinese-built ships within the
of a company's fleet', are defined as taxes that
"are partly weighted on the basis of the Chinese shipyards that
They built those ships. This - it is explained - would allow
to exert more pressure on China by targeting
specific shipyards".
Among other recommendations, it calls for measures to be taken to
attracting foreign investment in the shipbuilding industry
"encouraging and incentivizing the main
global players, in particular South Korea and Japan,
invest in U.S. shipyards. Politics - he continues
The document - should also court European companies, which
are world leaders in high-tech industries
shipbuilding. This would bring jobs, skills and
capital that is so much needed in U.S. industry."
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