US snubs key shipbuilding summit as global maritime rift deepens

Washington's attempts to counter China's shipyards have sent shock waves across the global industry

American shipyards will again be absent from a key annual summit for the global shipbuilding industry, in the latest sign that the United States is charting a lonely course as it strives to revive its maritime sector.

Washington has sent shock waves across the industry in recent months with its aggressive policies targeting China's dominant shipyards, which include plans to charge steep fees every time a Chinese-linked ship enters an American port.

The US claims the policy is necessary to counter China's unfair trading practices and allow American shipbuilders to compete, but the move has sparked intense backlash and market discussions about joint countermeasures.

Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge , our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.

Chinese shipbuilding industry representatives told a visiting Japanese delegation in Beijing last week that "globally concerning issues" should be discussed at the coming JECK Top Executive Meeting, a key annual industry summit.

The JECK meeting - which brings together shipbuilding executives from Japan, Europe, China and South Korea - was previously known as the JECKU summit, as it was customary for the United States to also attend.

But America has failed to send representatives to the gathering since 2023, and will also be absent from October's summit in Japan. The reason behind the US withdrawal from the event has not been disclosed.

After their routine meeting with Japanese counterparts last week, representatives from the semi-official China Association of the National Shipbuilding Industry offered only general comments on what had been discussed.

"The JECK conference mechanism has become the most important annual summit for the world's shipbuilding industry," said Li Yanqing, the head of the association. "We'll give our full support to it."

The traditional format for the meeting involves each delegation presenting reports on the economic conditions in their respective regions, as well as individual market briefings and discussions of challenges facing the industry.

The full agenda for the conference has yet to be published. For now, the spotlight is clearly on Washington's ambition to build a US commercial fleet to counter China.

In the past, the US has been solely represented at the summit by the San Diego-based shipbuilder General Dynamics NASSCO, according to the Shipbuilders' Association of Japan.

[US shipyards] would never be competitive price-wise with China or South Korea

Ralph Leszczynski, analyst

The small US delegation likely reflected America's tiny market share in the shipbuilding industry. US shipyards were handling less than 1 per cent of global outstanding orders as of February, whereas those from China, Japan and South Korea were handling 63.62 per cent, 12.33 per cent and 12.05 per cent, respectively, according to data from Clarksons.

"It is actually surprising that the US was in fact involved in international associations for shipbuilding given that their shipyards were not really competing in any way with commercial shipyards in Japan or South Korea," said Ralph Leszczynski, head of research for shipbroking and shipping services group Banchero Costa.

"Effectively their role was just as observers."

Leszczynski remains sceptical that the US will be able to create a competitive shipbuilding industry effectively from scratch - a feat that would require substantial investment and meticulous planning.

"They would never be competitive price-wise with China or South Korea," he said.

The US also aims to pressure shipping companies to cut Chinese vessels out of their fleets, and is working to forge closer ties with South Korea and Japan to marginalise China's shipyards.

But Leszczynski said it would be very difficult for South Korean or Japanese yards to significantly increase their production capacity any time soon.

Moreover, shipyards may be reluctant to make the long-term investments required to do so, given the uncertainty over how long the US will maintain its restrictions on Chinese-built vessels, he added.

Takaya Soga, the CEO of Japan's largest shipping line, NYK, was similarly downbeat about the ability of Japanese and South Korean shipyards to ramp up production to replace Chinese-built vessels.

Japanese shipbuilders will be operating near full capacity until 2028 and their South Korean counterparts have faced severe financial difficulties over the past two decades, making it challenging for them to expand capacity in the near future, Soga said during last week's Singapore Maritime Week conference, according to Reuters.