By Kota Mallikarjuna Gupta

Ships are considered vital for economic progress and military power from historical times. Maritime capabilities have facilitated for drastic changes in domestic political discourse and regional power dynamics. Large ships have facilitated the growth of global trade and the modern military to the next level. Asian Economies like China has hugely benefitted with colossal growth in ship-building capacities, which contributed immensely in China's emergence as the second-largest economy with the world’s second-largest defence budget. 

In the last two decades, Chinese Ship-building output experienced spectacular growth, which is an example for other large economies in the Indo-Pacific region like India. According to the China Association of the National Shipbuilding Industry, Chinese companies produced 43.2 per cent of the total global production of new ships in 2018; an increase from 41.7 per cent in 2017. However, China’s shipbuilding output was just six per cent and ranked third among the global industry in the year 2001. (Source: China’s Defense White Paper, 2002). China became a member of the World Trade Organization (WTO) in 2001, resulting in substantial changes to its domestic economy and its integration with the global economy. Overall, Chinese massive shipbuilding industry growth is due to both domestic and global factors. 

Extensive Reforms in Chinese Military Industries has resulted in large ship-building capacities for both military and commercial uses. Some of the major reforms were initiated in July 1999, when Corporations of five military industries, involved in nuclear, astronautics, aeronautics, shipbuilding and weapons sectors respectively were revamped to create 10 military corporations. Two Corporations for Ship-Building – China State Shipbuilding Corporation (CSSC) and China Shipbuilding Industry Corporation (CSIC) have emerged after the above reform initiative. Market competition mechanism was introduced with these reforms, which resulted in the gradual improvement of the structure and layout of the military industries. The civilian use of shipbuilding industries of military domain culminated in progress for mutual military and civilian shipbuilding industries. (Source: China Defense White Paper, 2000)

China’s Navy was successful to narrow down the technology and capability with modern navies during the 1990s and 2000s. It used to construct small numbers of a large variety of ships. During the period between 1995 - 2005, China built or purchased major surface ships and submarines of at least 15 different classes. It has used imported technologies, reverse engineering and indigenous development of technology to rapidly diminish the technological gap. The last import of a major naval platform from a foreign country was the SOVREMENNYY- II class destroyer in 2006. China has emphasized on longer production runs of its domestically produced modern surface ships and conventional submarines with contemporary designs.

In the last decade, Chinese Navy’s production shifted to platforms equipped entirely with indigenously developed weapons and sensors (though some engineering parts and subsystems were imported or license-produced). The series production of multiple new destroyer, frigate and corvette began with the country's technological progress. Its warships are comparable to ones employed by other modern navies. Chinese designs of JIANGKAI-AI class (Type-054 A) frigate series, LUYANG –class (Type 052 B/C/D) destroyer series and forthcoming new cruiser (Type 055) are considered comparable to any modern warship. (Source: China PLA Navy, 2015, Office of Naval Intelligence, U.S Navy)

Shipyards and their development are critical for advancement in Shipbuilding capabilities. The robust shipbuilding activity in Shipyards will boost multiple associated industries, which will supply various products required in the shipbuilding process. Huludao Shipyard has built all the ballistic missile, nuclear-powered submarines (Xia- Type 092 and Jin –Type 094) for People’s Liberation Army Navy (PLAN). Attack Submarines like Han- Type 091/091 G and Shang –Type 093 were manufactured at Huludao Shipyard and Bohai Shipyard respectively. Patrol Submarines like Yuan-Type 039A/B/C, Song- Type 039/039 G, Kilo- Project 877 EKM/636 and Ming-Type 035 are mostly manufactured at Wuhan Shipyard. (Source: 2017 IHS Janes: World Navies) 

Similarly, Jiangnan Shipyard was primarily responsible for building Luyang I (Type 052B), Luyang II (Type 052C), Luyang III (Type 052D) and Luhu (Type 052A) class Destroyers for PLAN in the 21st century. Huangpu Shipyard/ Hudong Shipyard specializes in the construction of Jiangkai I (Type 054), Jiangkai II (Type 054A), Jianghu III (Type 053H2) and Jiangwei II (Type 053H3) class frigates for PLAN. Another Shipyard located at Qiuxin is known for building mine countermeasures like Wochi (Type 081) and Wozang (Type 082 II), Hovercrafts of Yuyi (Type 726) class, Naval intelligence collection like Dongdiao(Type 815) and survey ship and electronic intelligence(Dahua). Hospital ships like Anwei (Type 920) & Qiongsha; Submarine support ships like Dalang- (Type 922/II/ III) and Dalao (Type 926) are all built at Guangzhou shipyard. (Source: 2017 IHS Jane’s: World Navies)

China purchased an uncompleted take-off but arrested recovery (STOBAR) aircraft carrier from Ukraine for some USD 200 million to convert as a floating casino in 1998. The major refurbishment work started in 2005 and was converted into59, 439 ton Liaoning (ex-Varyag) which was commissioned by PLAN on September 25, 2012. Liaoning aircraft carrier was refurbished by Dalian Shipbuilding Industry Company (DSIC). According to Xinhua, Liaoning is capable of carrying up to 36 aircraft, which include Z-18J airborne early warning (AEW) helicopters, six Z-18F ASW helicopters, two Z-9c SAR helicopters and 24 J-15 fighter jets. China prioritized the work to complete the first aircraft carrier during the 12th five-year plan (2011-15).

China’s second aircraft carrier /Type 001A is China’s first indigenous aircraft carrier constructed at Dalian Shipyard. (Source: 2017 IHS Jane’s: World Navies) The 65,000 ton Type 001A was launched in 2017. China is still conducting sea trials for Type001 A in August 2019. (Source: Popular Mechanics) 

According to the South China Morning Post in February 2019, China plans to have six aircraft battle groups by 2035. Four of these six aircraft battle groups will be nuclear powered. These new aircraft carriers will be equipped with electromagnetic catapults, which can launch aircraft rapidly than diesel systems. The construction of diesel-powered aircraft carrier /Type 002 equipped with electromagnetic launcher started in 2018.

China successfully launched Long March 11 rocket, carrying seven satellites from a ship/mobile platform in the Yellow Sea on June 5. This was the China National Space Administration (CNSA) first space launch from a ship. (Reuters) 

Ship-building industry in China faces a range of challenges. The plans for the restructuring of the CSSC will result in a merger with CSIC, said in an announcement on July 1, 2019. These two ship-building corporations together have assets worth 800 billion Yuan / US $ 101.92 billion. The restructuring of CSSC and CSIC would require approval from the PLAN, as both of these companies build military warships for them. There are also talks between China Merchants Industry Holdings Co. Ltd., China International Marine Containers Group Co. Ltd., and AVIC International Holding Corp. for a strategic merger.

According to the China Shipbuilding Industry Association, the revenues and profits have decreased by 30.8 per cent and 23.5 per cent respectively in 2018, when compared with 2017. Similarly, new orders also decreased by nearly 40 per cent. (Source: July 18, 2019, Caixin Global) 

China’s military shipbuilding capabilities have expanded significantly in the 21st century. The recent focus of Chinese military forces was on building modern large ships and submarines. This military modernization was possible because of necessary budgetary support for naval capabilities. The successful construction of two indigenous aircraft carriers in the last few years shows the priorities of the Chinese military. The military budget of China is increasing consistently. Despite the economic slowdown, the naval modernization budget is not expected to be decreased even if the total military budget is decreased. According to Wang Yunfei, a naval expert, China will give priority to the construction of aircraft carriers over new tanks or other infrastructure. 

The emergence of PLAN as a modern navy is reshaping the geopolitics of the world.  It is challenging the status quo and is forcing the world to accept its set of rule. India, being its major adversary in the east, will have to strengthen its navy to check PLAN's eastward expansion. This is possible only if India achieves self-sufficiency in warship making. The Chinese shipbuilding story provides India with much required how to do it. India can learn lessons from China story to strengthen itself to check the PLAN's geographical expansion.

Author is a Doctoral Candidate in Chinese Studies at the Center for East Asian Studies, Jawaharlal Nehru University.