Greater ChinaShipyards

Hundreds of thousands of Chinese shipyard workers face the axe

Reuters is reporting that China aims to lay off 5m to 6m state workers over the next two to three years as part of efforts to curb industrial overcapacity and pollution. Coal and steel industries are likely to lead the cutbacks, with other sectors where overcapacity is hurting including cement, glassmaking and shipbuilding also facing significant change.

The government has already drawn up plans to cut as much as 150m tonnes of crude steel capacity and 500m tonnes of surplus coal production in the next three to five years.

On shipbuilding, which has seen massive contraction in the last three years, the job losses could be in the hundreds of thousands, Splash understands.

Jin Peng, secretary general of the country’s national shipbuilding association, said he does not know the scale of the potential redundancies in the sector. He did state however: “Overcapacity is still one of the major problems in the shipbuilding industry, and the industry is facing a major reshuffle and does need a restructuring.”

Martin Rowe, a veteran broker with Clarkson Platou in Hong Kong, commented: “Clearly as Chinese labour costs rise – especially in coastal provinces where most of the big state yards are – and the country moves towards a more services driven economy the raison d’etre for shipyards being a sink for labour falls away.”

Rowe suggested China would do well to examine how yards in Japan managed to survive in a previous scenario when a major economy transitioned “from metal bashing to widget manufacturing and services”.

Jason Jiang

Jason is one of the most prolific writers on the diverse China shipping & logistics industry and his access to the major maritime players with business in China has proved an invaluable source of exclusives. Having been working at Asia Shipping Media since inception, Jason is the chief correspondent of Splash and associate editor of Maritime CEO magazine. Previously he had written for a host of titles including Supply Chain Asia, Cargo Facts and Air Cargo Week.
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