China’s shipbuilding industry is undergoing a transformation, and the world is watching. Ten years after Xi Jinping’s government launched Made in China 2025 and military-civil fusion, the impact on shipbuilding is becoming clear. This isn’t just about market share—it’s about technological leaps, military-civil integration, and reshaping global maritime power dynamics.
Made in China 2025 set ambitious targets: five globally competitive shipbuilding firms, 40% of the maritime equipment market, 50% of high-tech ship design, and 80% localization for advanced vessels. The policy pushed Chinese yards into complex vessel types—LNG carriers, green-fuel ships, cruise liners, and RORO vessels. But the real story isn’t just about meeting quotas. It’s about the technological advancements that have followed.
China’s shipbuilding was vast but relatively simple in 2015. Orders were concentrated at the lower end of the value chain, with limited capacity for complex vessels. Chinese shipyards were less productive than their South Korean and Japanese counterparts, relying on foreign partners for advanced technology. However, the industry has since made significant strides. By 2024, China accounted for 53.3% of global shipbuilding, with state-owned China State Shipbuilding Corporation producing more commercial vessels by tonnage in one year than the United States has since World War II.
The shift isn’t just about scale. It’s about capability. China now leads in new orders for bulk carriers, tankers, and container ships, and is narrowing the gap in LNG carriers. Offshore support vessel production surged by 256% year-on-year, driven by improvements in quality and efficiency. These advancements aren’t happening in isolation. They’re part of a broader strategy to integrate civilian and military industries, a policy known as military-civil fusion.
Military-civil fusion aims to create a symbiotic relationship between defense and civilian sectors, driving innovation and technological advancement. Chinese naval shipbuilders engage in major commercial production, generating billions in revenue from foreign orders. This commercial expertise, revenue, and manufacturing capacity can be quickly repurposed for military objectives. Satellite imagery often shows merchant vessels being built alongside aircraft carriers, highlighting the blurred lines between civilian and military shipbuilding.
The implications for global maritime power are profound. As China’s shipbuilding industry advances, so does its naval capability. The policy connections between commercial maritime power and naval strength are well-established, and China is leveraging this to its advantage. Naval theorist Alfred Thayer Mahan’s writings, which emphasize the importance of sea power, are widely discussed in China and have influenced its naval development.
This isn’t just about China’s rise. It’s about how the rest of the world responds. As the naval balance in the Indo-Pacific shifts, policymakers must understand these trends and their implications. The technological advancements in China’s shipbuilding industry, driven by Made in China 2025 and military-civil fusion, are reshaping the maritime landscape. The question now is how other nations will adapt to this new reality.