ChinaPower

China’s Shipbuilding Dominance: A Conversation with Eric Labs and Matthew Funaiole

May 8, 2025
In this conversation, Matthew Funaiole, a senior fellow at CSIS, and Eric Labs, a senior analyst at the Congressional Budget Office, delve into the stark contrast between U.S. and Chinese shipbuilding capabilities. They discuss how China's industrial growth, fueled by state support, poses significant strategic challenges for the U.S. The duo outlines potential policies to revitalize U.S. shipbuilding, including labor improvements and partnerships with allies. Their insights illuminate urgent concerns over U.S. naval readiness amid a changing global landscape.
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INSIGHT

Industrial Capacity Shapes Naval Strength

  • China's shipbuilding capacity surpasses the US in industrial scale, though US ships remain higher quality.
  • China’s ability to rapidly replace losses in a prolonged conflict mirrors the US-Japan dynamic in WWII but in reverse.
INSIGHT

China's Dominance in Shipbuilding

  • China dominates commercial shipbuilding producing over 50% globally and more tonnage at one builder than the US has since WWII.
  • This dominance results from massive state subsidies, cheap inputs, and strategic industrial planning over decades.
INSIGHT

WWII Lessons for Naval Capacity

  • In WWII, US industrial might allowed it to massively outproduce Japan in naval tonnage, despite Japan initially having better quality ships.
  • Today, the US risks losing this advantage as China builds industrial capacity to outproduce the US in shipbuilding.
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