The industry's "four difficulties" were prominent in the first half of the year

In the first half of 2013, affected by the continued downturn in the global shipping and shipbuilding markets, China's shipbuilding industry's main shipbuilding indicators and economic indicators continued to decline; difficulties in delivering ships, receiving orders, financing, and profitability remained prominent; the risks and challenges facing shipbuilding continued to increase, and international competition became more intense. Faced with the complex and severe situation in international shipbuilding, under the care of the new government, enterprises throughout the industry faced the crisis head-on, maintaining confidence and boosting morale, focusing on structural adjustment, transformation and upgrading, and resolving overcapacity, actively resolving contradictions and difficulties in economic operation, and striving to promote steady and healthy economic development.

According to the latest report from the China Association of the Shipbuilding Industry (CANSI), in the first half of the year, the new government's relevant departments paid close attention to issues such as the continued downturn in the shipbuilding market, the increasing difficulties in enterprise production and operation, the decline in capacity utilization rate, and the general shortage of shipbuilding funds. It played an important role in maintaining production growth, promoting structural adjustment, and facilitating transformation and upgrading in China's shipbuilding industry. The shipbuilding market also showed signs of becoming more active, with breakthroughs in high value-added orders. At the same time, the order volume of Chinese shipbuilding enterprises increased significantly, and key shipbuilding enterprises responded to structural changes in the market, making breakthroughs in the undertaking of LNG carriers, large container ships, and energy-saving and environmentally friendly ships.

In the first six months of this year, the global offshore engineering equipment market remained active, which is also a trend. China's offshore engineering equipment competitiveness has increased, and its market share has significantly improved. Market competition has intensified in the first half of this year, and the advantages of key shipbuilders have gradually increased.

Key shipbuilders have responded to the requirements of new international shipbuilding standards and regulations, increased the development of energy-saving and environmentally friendly new ship types, optimized the three main ship types, and made every effort to undertake new ship orders. Against this backdrop, strengthening technological innovation and strictly controlling quality costs has become a common consensus among enterprises. Faced with changes in the structure of shipbuilding market demand and the "four difficulties" in industry development, enterprises in the industry increasingly recognize that they must vigorously promote technological innovation and transformation and upgrading to overcome difficulties.

In addition, the shipbuilding industry is a typical cyclical industry. During periods of industry downturn, shipbuilding enterprises actively expand non-ship businesses and diversify their development to mitigate risks. In the first half of this year, a trend emerged among major enterprises to actively expand non-ship businesses and diversify their development to mitigate risks.

Finally, there is strong support for the development of key enterprises and the active promotion of mergers and acquisitions. Currently, shipbuilding enterprises in various regions generally face a situation where about one-third of key enterprises are operating normally, one-third have insufficient tasks, and one-third are facing unsustainable production. In response to this situation, supporting the development of key enterprises, promoting mergers and acquisitions, eliminating backward production capacity, optimizing resource allocation, and improving industry concentration have become imperative. Some regions have conducted special surveys to promote the healthy development of the industry.

In addition, several issues emerged in the first half of this year: ▲A significant rebound in new orders, but market recovery is still uncertain; ▲A significant increase in shipbuilding costs, leading to prominent contradictions in declining enterprise profits; ▲Financial institutions tightening credit, leading to a continuously deteriorating financing environment; ▲The depreciation of the Japanese yen and South Korean won and the appreciation of the RMB, impacting the Chinese shipbuilding industry; ▲The accelerated pace of structural adjustment and optimization, posing challenges due to insufficient technical capabilities.

To address the above issues, CANSI suggests the following solutions: taking proactive measures to respond to changes in market competition factors; financial institutions increasing their financing support for key enterprises; implementing financial and tax support policies to promote industrial structural adjustment and transformation and upgrading; and formulating detailed rules for resolving overcapacity and adjusting and optimizing industrial layout.