China surpasses Japan to become the world's second-largest ship owner

2018-08-19 09:00

Due to the rapid expansion of the Chinese fleet, China has surpassed Japan to become the world's second-largest ship owner, and the gap with Greece, the world's largest ship owner, is narrowing.

As of the end of August, the Greek fleet totaled 222 million deadweight tons, but the Chinese fleet has reached 7,744 ships with 170 million deadweight tons, exceeding Japan's 167.6 million deadweight tons. Since 2014, the Chinese fleet has grown by 34%, while the Greek fleet has grown by 23%, and the Japanese fleet has only grown by 2%.

According to Clarkson's data, at the end of last year, shipyards delivered 25.5 million deadweight tons to Chinese ship owners, equivalent to 17% of the existing fleet. In the backlog of orders, most new ships are scheduled for delivery in 2018, with a notable number of bulk carriers, tankers, and container ships.

Newbuilds are the most obvious growth factor for the Chinese fleet. Other factors include the purchase of second-hand vessels in the international market and the scrapping of older vessels. These transactions are difficult to fully track and monitor, so overall estimates rely to some extent on speculation.

Most of the growth in the Chinese fleet comes from second-hand vessels, with Greece being a major seller to China. This year alone, more than 20 vessels with a total deadweight tonnage exceeding 10 million tons have been transferred from Greek to Chinese owners.

Richard Scott, Analyst and Deputy Director of the Solent University China Centre (Maritime) Bulk Shipping, stated that the strong growth of the Chinese merchant fleet has been evident. In 2017, the Chinese fleet increased by more than 9%, and this year's increase may be comparable to last year's. New ship orders to be delivered in the next two to three years will add significant capacity, but other unpredictable influences may also determine fleet growth.

Scott indicated that many new ships will be chartered in long-haul international trade involving Chinese importers or exporters. In the case of container ships, cargo to and from China may provide chartering opportunities, while for the largest bulk carriers, import trade will be most prominent. With significant transportation of finished goods and bulk commodities, the possibility of further Chinese ship involvement is very high, but on certain trade routes, vessels of other nationalities may be replaced.

Scott's analysis shows that in the past three years and eight months, the Chinese fleet has increased by one-third, growing faster than the Greek fleet and far exceeding Japan's minimal growth rate. According to Clarkson's data, the Chinese fleet's growth rate was 6.5% in 2015, 7.5% in 2016, 9.4% in 2017, and 7.1% from January to August 2018.

Although China has just become the world's second-largest ship owner, the large number of ore carriers, tankers, and container ships to be delivered in the coming years means that the capacity of Chinese ship owners will be further enhanced.

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