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Editor in chief: Angelo Scorza
11/09/17 08:34

China declared war on European shipyards for cruises

The fact that, in its “Made in China 2025” development program, China clearly states its aim to grow in the passenger ships sector might speed up the agreement between Rome and Paris for Stx France

Although a few months ago it was only a remote fear, China is becoming a serious threat to the competition between Italy and France to gain control over Stx France.

The People's Republic has recently showed its determination to gain new orders for its shipyards in a period of few investments by shipowners. Within the container ship sector, South Korean competitors lost an order of the French shipping company Cma Cgm for nine container ships because Chinese competitor shipyards Shanghai Waigaoqiao Shipbuilding and Hudong-Zhonghua Shipbuilding granted a 10% discount on an order of about 1.5 billion dollar.

With the same attitude, China seems to be determined to enter the cruise ship business as in the past years it entered into a few partnerships (with Fincantieri, Carnival Corporation and engine manufacturer Wartsila) that will give birth to the first two 5,000 passengers units to be built in the  Shanghai Waigaoqiao Shipbuilding shipyard, a member of the China State Shipbuilding Corporation group.

Now, however, China is aiming at something more. As a matter of fact, its “Made in China 2025” development program specifically mentions naval engineering for cruise units as a sector to enter by “stealing” market shares from its European competitors Fincantieri, Stx France and Meyer Werft. According to Marintec China deputy chairman Fu Chunhond, besides China State Shipbuilding Corporation, also China Merchants Industry Holdings and Xiamen Shipbuilding Industry Co. could build passenger ships.

“This is a state goal that could affect the competition significantly”, recently pointed out Reinhard Luken, Head of the German association representing naval engineering: “If China set its goal, it has almost infinite resources to achieve it”. According to experts from the sector, however, given the structured network of suppliers needed, learning to build cruise ships will not be easy for the Chinese. For example, Mitsubishi Heavy Industries stopped building cruise ships after it lost more than 2 billion dollar to build two vessels for Aida Cruises.

In fact, China's move towards the cruise ships sector results also from the slump in demand of cargo vessels and from its consequent negative effects on Chinese shipyards, but it could affect significantly also the on-going negotiations between France and Italy to gain control over Stx France. Fincantieri is a partner of the Chinese of Cssc, and France does not like it (trade unionist Nathalie Durand-Prinborgne, representing Force Ouvrière at STX France, had said to reuters: “By forming an alliance with the Chinese, Fincantieri is not cutting only its own throat, but also ours”) , but both countries have reasons to fear that China might advance in shipbuilding for passenger ships. Therefore, China's objective to enter the shipbuilding business within the cruise sector might turn into an incentive to find an agreement giving rise to a jointly controlled large Italian-French group operating both in the merchant and in the military business.