China's shipbuilding consolidation seeing positive resultsChina's shipbuilding consolidation seeing positive results

Li Dong, deputy head of the equipment manufacturing division at China's ministry of industry and information technology, said that the bottom-rung yards are generally in a dormant state or operating at half their capacity.

With owners becoming more cautious in choosing a reputable shipyard and higher requirements for more technologically-advanced vessels, the phasing out process of those speculative and less capable yards has hastened, bringing about a greater consolidation of China's shipbuilding industry, Li noted.

in August last year, China's State Council unveiled a three-year plan to revive the country's shipbuilding industry, which is struggling with overcapacity. The 2013-2015 plan aims to bring about the advancement of technology in shipyards, an expansion into offshore shipbuilding and equipment construction, a strict control on adding new yard capacity, a quicker phasing out of old vessels, the enhancement of corporate management and services, and capturing of a larger global market share.

Li pointed out that the above-mentioned national policy is also aimed at encouraging the greenfield yards to shut down and those small to medium sized enterprises to leave the business, so as to streamline the sector and raise the industry's overall competitiveness.

China had more than 3,000 yard enterprises including about 400 larger yards at the start of 2010. By 2011 when the shipbuilding recession hit home, throngs of small to medium sized private enterprises shut down or filed for bankruptcy. Today, there are roughly 1,600 yards scattered across the country, and 50% of them are predicted to go bust over the next year.

Meanwhile, China's shipbuilding sector has reported more positive figures in 2013, with newly received tonnage amounting to 69.84m dwt, soaring 242% year-on-year. Chinese yards accounted for 47.9% of the world's total newbuilding tonnage at 145.78m dwt in 2013, according to figures from the ministry of industry and information technology.