Sailing into a New Golden Age 
For the shipbuilding industry, now the market is building very rapidly. As for the Jiangnan shipyard, everything is fully booked until we schedule more orders for our new island shipyard, Chang Xin. We have orders up til 2007.
In the 1970s, China could only build ten thousand tons of shipping annually. In 2004, more than 8 million tons were built. In 2005, the number is expected to exceed 10 million tons. Ships built in China have been exported to over 90 countries and regions,especially to Europe.
Vijay Bhalla, Indian Marine Engineer, K. C. Maritime Ltd. Hong kong.
-For this particular type of vessel we are building, there wasn鈥檛 enough shipyards available outside China since the shipyards in other countries like Japan and Korea are usually full.
The second important reason could be that the cost effectiveness was also in mind of the owners.
So, when they compared the cost effectiveness and the response from the Chinese shipyards, they probably decided to build their ships in China.
Like other industries in China, a low-cost labor force is also a huge advantage to the shipbuilding industry. China鈥檚 Shipbuilding Corporation alone employs 100,000 workers.
In China Shipbuilding costs are comparatively low, compared with
20% -30% of similar costs in Japan鈥檚 shipbuilding industry, for example.
- I鈥檝e tried the Chinese before, about ten years ago, because we did some vessels in Guang Zhou and also Shanghai shipyards.
Ten years ago, I can remember that those days, people were not interested by their jobs. Ok, the money was paid, the salary was fixed, but they usually tried to escape from their jobs. But nowadays, they鈥檙e offered a job. They listen what you tell them and they do their best to do the job. And also, they are very polite and cooperative.
A Low-cost labor force does not mean low quality techniques or technologies. The Shipbuilding industry requires a technology-intensive and skilled-labor-intensive multiplex. Today, many vocational schools with professional and advanced shipbuilding courses have been established in China.
The large number of cheap labor available in China has contributed a lot to the rapid development of the shipbuilding industry, and will be a very strong competitive edge over other shipbuilding countries.
However, low labor costs are far from enough for China鈥檚 shipbuilding industry to overtake Korea and Japan. Low production efficiency, low scale benefits and a lack of Chinese-produced specialized equipment largely cancels out the advantages of China鈥檚 low labor costs.鈥
Statistics show that foreign shipyards are 5-7 times more productive than China鈥檚 in terms of 3 indexes. Japan鈥檚 production efficiency is ranked as #1. Korea鈥檚 is 2ND and 3rd. While China鈥檚 falls somewhere between 5th and seventh place in efficiency.
