Shipbuilding: US-China hegemonic competition, Economic-Security Strategy

Shipbuilding: US-China Hegemonic Competition, Economic-Security Strategy

Wartime manufacturing supply chain?

Nations that conquer the seas have historically dominated the world, and those that lose them have fallen from grace. A nation's shipbuilding and shipping industries were key to its global hegemony, and therefore key to its national security.

China dominates both the global shipbuilding and shipping industries, and the United States is losing its shipbuilding and shipping competitiveness due to high labor costs and a declining ability to trade goods.

On March 12, several unions, including the United Steelworkers of America, asked the administration for trade relief and state aid for the shipbuilding industry, arguing that China is distorting global markets in the maritime, logistics, and shipbuilding industries.

Shipbuilding: US-China hegemonic competition, Economic-Security Strategy

World No. 1 (1975) U.S. shipbuilding ranks 19th in the world ... builds less than 1% of the World's merchant fleet

Over the past few decades, the United States has gradually lost the ability to build its own ships. Most ships are built overseas, and only specialty ships, warships, and other vessels critical to national security are built in the United States.

According to UNCTAD, China is the world's largest shipbuilder. South Korea is second, and Japan is third. China accounts for about 45% of production, followed by South Korea at about 35% and Japan at 18%. These three countries account for more than 95% of the world's shipbuilding.

Shipbuilding technology and scale are essential for naval buildup. Recently, the US Congress stated that the number of warships in the Chinese Navy has overtaken the number of warships in the US Navy. In terms of quantitative scale, the Chinese navy is overwhelmed.

U.S. Congressional Research Service

Of course, on a qualitative scale, the U.S. Navy still dominates the PLA's combat power. However, a widening gap on a quantitative scale could prove to be a significant weakness in the real world.

The U.S. and China are ostensibly engaged in a trade and technology competition, but in reality, they are engaged in a hegemonic competition, and the U.S. must respond to China's military buildup.

https://www.visualcapitalist.com/worlds-busiest-ports/

U.S. ports also rank low in terms of major ports around the world. China has three of the top five ports in the world, with Busan, South Korea, ranking fifth.

With China controlling the majority of the world's major trading ports, China has launched a global logistics supply chain platform, Logink, which is being deployed free of charge in many ports around the world. This allows you to see the types and volumes of major merchant ships and cargo around the world, as well as the routes they take. For the United States and its key allies, this poses a serious threat to military security.

China has well established supply chains for shipbuilding and shipping, and the United States has lost much of its own supply chain for shipbuilding and shipping. The U.S., along with allies such as South Korea and Japan, is likely to reorganize its supply chain to counter Chinese shipbuilding and shipping.

• As the U.S. Reindustrializes, What's the Future of Shipbuilding and Shipping Worldwide?
• How many more industries will see supply chain reorganization in the future?

We are witnessing the reindustrialization of America.

Efforts are underway to bolster economic security, including supporting the supply chain for semiconductor, secondary battery, and electric vehicle manufacturing. Shipbuilding is part of that effort.

The problem is that building a shipbuilding and shipping industry is not an easy road for the United States.

• Shipbuilding technology, labor, labor costs, etc... Re-industrialization is not easy

• Semiconductors, batteries, etc... How far is the supply chain reorganization for economic security?

Major semiconductor companies such as Samsung Electronics, Intel, and TSMC are building semiconductor production plants in the U.S., but shipbuilding has become a less desirable career choice due to a shortage of skilled workers and harsh working conditions. The problem is that shipbuilding has a harsher working environment, worse working conditions, and more labor requirements than semiconductor factories.

In the future, the U.S. is likely to offer investments to strengthen the supply chain of shipbuilding and shipping, and the manufacturing and defense sectors related to reindustrialization will become more attractive.

Major U.S. Stocks, U.S. ETFs Related to Shipbuilding, Shipping :

• (XLI ETF)Industrial Select Sector SPDR Fund
• (HII)Huntington Ingalls Industries

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