The growing dominance of China in the global shipbuilding industry is putting pressure on South Korean and Japanese shipbuilders and forcing the two countries to rethink their competitive strategies. South Korea is looking to retain its leadership in complex offshore engineering and in higher-value vessels while Japan is looking to strengthen its shipbuilding capabilities through industrial cooperation, technology development and improved productivity.

Asia has taken a leading role in the development of the global shipbuilding market, Li Yanqing, vice-chairman of the China Association of the National Shipbuilding Industry (CANSI), said in Singapore on November 12. For several decades, different countries in the region successively took the leading positions through considerable industrial efforts. According to Li, China has now assumed that leading role.

He made the remarks at a panel discussion attended by representatives of the Asian shipbuilding industry at the 17th Asian Shipbuilding Experts Forum (ASEF) 2026 and the 3rd ASMI Marine and Offshore Energy Forum 2026.

China's current position is reflected in the figures released by the Chinese government for the first half of 2026. During this period, the country made up 62.2% of global shipbuilding output, received 82.3% of newly placed orders and held 71.2% of the global orderbook.

South Korea bets on innovation to keep its high-value shipbuilding crown

In light of these developments, South Korea’s focus is on preserving its technology lead in advanced shipbuilding sectors. Korean shipbuilders are “continually assessing where we stand with international competitors,” said Choong Jong Oh, vise chairman of the Korea Offshore and Shipbuilding Association (KOSHIPA).

He described the industry as rowing a boat against a strong headwind and said it is a constant effort to stay ahead.

"Shipbuilders in Korea are asking themselves if they are still the leaders of the industry," Choong said. This pressure is driving significant investment in research and development, particularly in the areas of technological innovation, high value vessels and environmentally friendly solutions.

South Korea is furthering its know-how in areas including LNG carriers, floating liquefied natural gas (FLNG) facilities and floating production, storage and offloading units (FPSOs).

It is widely accepted that technology development alone is not sufficient to maintain competitiveness. Korean shipyards are also putting money into artificial intelligence, robotics and automation to boost industrial productivity and modernize their production processes.

Choong also noted the benefits of South Korea’s domestic shipbuilding ecosystem, comprising major industrial groups such as Hyundai, Samsung and Hanwha, backed by a network of specialized materials and equipment suppliers.

But he stressed the need for a wider international approach in an effort to ensure a competitive supply chain. Korean shipbuilders need to look for opportunities overseas, team up with foreign companies and boost cooperation with global suppliers to maintain continuity and resilience in their supply chain operations.

Japan aims to increase competitiveness via productivity and cooperation

Japan has a different sort of industrial problem. The country is facing further pressure from China’s rapid expansion and increasing dominance of the global shipbuilding market, after it lost its former leading position to South Korea.

“The market environment is challenging,” said Hideaki Saito, executive managing director of the Shipbuilding Association of Japan, while reaffirming the country’s commitment to improve its ability to deliver competitive vessels and contribute to the sustainability of the global maritime industry.

The Japanese government aims to have an annual shipbuilding capacity of 80 million gross tons by the year 2035. "This goal is an important direction for the industry development of the country," Saito said.

He cited as one of the main competitive advantages of Japan the well-established domestic relationships between shipbuilders, shipowners, marine equipment manufacturers and engineering specialists.

The difficulty, however, is in turning this industrial base into real productivity gains and quicker commercialization. Japan’s shipbuilding revitalization roadmap is expected to help this process.

Saito says investment needs to be more than just shipyard facilities. Building up the workforce, enhancing digital engineering capabilities and ensuring an efficient supply chain are equally crucial for the country’s industrial recovery.

He also said that competitiveness should not be measured only by the first price of a vessel. Also, operational reliability, fuel efficiency and long-term value must be a central component in the assessment of a ship's performance over its service life.

Japanese shipbuilders find new opportunities in alternative fuels

Japan, too, is seeking to enhance its position in the international market through the development of next-generation ships and marine equipment.

The strategy will include ships and onboard technologies that will be able to run on alternative fuels such as methanol, ammonia and hydrogen as well as the development of energy-saving solutions.

Saito, however, stressed the need for a pragmatic approach to the energy transition. The most suitable fuel will depend on a number of factors, such as the type of vessel, its operating routes and the availability of the relevant fuel infrastructure.

He also cautioned against thinking that a fuel automatically means lower emissions just because of what it is called. Instead, environmental performance should be assessed over the whole fuel lifecycle.

This approach offers Japanese shipbuilders possibilities in the design of more efficient vessels and the safe integration of new propulsion technologies. Home marine equipment makers will focus on developing reliable propulsion systems, fuel handling solutions and control technologies.

The competitive environment in Asian shipbuilding is changing.

China, South Korea and Japan’s positions reveal different strategies emerging in Asia’s shipbuilding industry.

China is cementing its global leadership with huge production capacity and a growing orderbook. Seoul plans to maintain its dominance in the more sophisticated ship segments through research, automation and cooperation on global supply chains.

At the same time, Japan is in the midst of a broader industrial overhaul that involves expanding capacity, increasing productivity, developing the workforce and investing in alternative-fuel technology.

“Technologically advanced, operationally reliable, environmentally performing and competitively priced vessels will remain at the core of Asian shipbuilders’ future positioning as competition heats up.”