In a bid to enhance the global competitiveness of its shipbuilding sector, China's two largest state-owned shipyards are merging to create the world's biggest ship manufacturer as part of the country's ongoing efforts to reform and strengthen its state-owned enterprises (SOEs).
Earlier this month, the China State Shipbuilding Corporation (CSSC) and the China Shipbuilding Industry Corporation (CSIC), two listed SOEs, announced plans to merge. The resulting company is expected to boast annual sales exceeding 17 billion U.S. dollars.
According to CSSC, the merger aims to "accelerate the high-quality development of the ship assembly business, standardize competition in the industry, and improve the operational quality of listed companies."
This move is in line with China's broader strategy of consolidating SOEs to increase their global competitiveness, experts said.
"Restructuring is part of the deepening reform of SOEs, aligning with national strategies and advancing the equipment manufacturing industry. The new company from this merger will enhance R and D and production capacity, improving its global competitiveness and driving China's shipbuilding industry toward high-end manufacturing and greater innovation," said Tian Lihui, director of the Institute of Finance and Development at the Nankai University.
The merger reflects a broader trend of consolidation among China's listed companies.
According to a financial sector insider, this trend has been partly driven by favorable policies from the China Securities Regulatory Commission (CSRC), which earlier this year introduced measures to encourage mergers, acquisitions and restructuring.
"China's securities market is witnessing a surge in mergers and acquisitions, with companies -- both state-owned and private - expanding their scale and strengthening their positions through strategic integrations. We have also seen some cases, not just the shipbuilding industry, including the integration in the securities industry. In the next phase, I anticipate an increase in the frequency and intensity of such corporate consolidations, not only among central enterprises but also involving private enterprises. This trend is likely to continue, with more cases emerging in the future," said Chen Xi, investment director and partner of the Red Horse Investments Group, a private equity firm in China.
China's shipbuilding sector has shown impressive growth in the first half of this year.
According to data released by the Ministry of Industry and Information Technology (MIIT), from January to June, China completed shipbuilding projects totaling more than 25 million deadweight tonnes (DWT), a measure of how much weight a ship can carry, representing an increase of 18.4 percent compared to the same period last year. New orders surged to more than 54 million DWT, reflecting a remarkable year-on-year growth of 43.9 percent.
By the end of June, the order book stood at 171.55 million DWT, up 38.6 percent from the previous year.
The MIIT's data also demonstrates China's dominant position in the global shipbuilding market. In the first half of this year, the country's shipbuilding completions, new orders, and order book as measured by DWT accounted for 55 percent, 74.7 percent, and 58.9 percent of the global totals, respectively.
In 2023, the three key market indicators stood at 50.2 percent, 66.6 percent, and 55 percent.
China's two largest shipyards merge to form global shipbuilding giant
Chinese President Xi Jinping's New Year message delivered on the New Year Eve has drawn positive responses from scholars and former officials from several countries, who say that the series of global initiatives proposed by Xi have provided fresh momentum for multilateralism and shared development at a time of growing uncertainty.
While the reactions touched on the broader vision outlined in Xi's New Year message, they also focused on the initiatives Xi has put forward over recent years, particularly the Global Development Initiative, the Global Security Initiative, the Global Civilization Initiative and the newly proposed Global Governance Initiative.
Highlighting the significant importance of these initiatives, they have emphasized the need for equality, inclusiveness and a fairer international order.
"We need a more just international order and a truly multilateral system. China stands almost alone today as a global force actively advancing genuine multilateralism. Therefore, these initiatives are most welcome," said Michael Schumann, chairman of the German Federal Association for Economic Development and Foreign Trade.
Former Lebanese Prime Minister Hassan Diab has placed the emphasis on dialogue and trust-building between civilizations.
"It is essential now more than ever to promote communication and understanding between China and the world to enhance cultural exchanges and build mutual trust. As President Xi has repeatedly emphasized, China supports principles of unity, inclusiveness and peacefulness. These values should guide our collective efforts to build bridges rather than walls," he said.
From a governance perspective, Russian scholar Ekaterina Zaklyazminskaya, head of the Center for World Politics and Strategic Analysis at the Institute of China and Modern Asia under the Russian Academy of Sciences, has viewed the Global Governance Initiative as a structured response to global challenges.
"The recently proposed Global Governance Initiative presents a comprehensive framework of ideas. It prioritizes establishing a more just international order, champions multilateralism, and upholds the principle of 'people first.' Through its concrete practices, financial assistance, and tangible support for multilateral bodies like the U.N., China has demonstrated that its commitments are substantive. China is taking tangible steps toward a fairer and more reasonable global governance system," she said.
Scholars from the Global South also have seen historical echoes in the initiatives.
"Some of the developed and developing countries have highly welcomed the Global Development Initiative, because this initiative emphasizes the need for partnerships -- partnerships that commit resources to end global poverty and pursue common and shared development. The Global Governance Initiative, in my view, echoes again the call that was made by Asian [and] African countries at the Bandung Conference in 1955 for equality, for mutual respect, for respect of territorial integrity, [and] for respect of sovereignty," said Bongani Maimele, director of international relations at South Africa's National School of Government.
"These initiatives are revolutionary in nature. They are reshaping the political philosophy of global governance. Today's world is far more complex than it was 80 years ago, and interdependence among nations has deepened. Therefore, we need new philosophical perspectives to examine our world and new models of engagement to foster a new type of international relations," said Sheradil Baktygulov, director of Kyrgyzstan's Institute of World Policy.
Int'l scholars praise Xi's initiatives, call for stronger multilateralism
