Shipyards Are Vital Link In National Security
A flurry of recent stories in the media has reported on China’s breakneck efforts to become “the world’s shipyard.” The Chinese government has built modern new yards and forged close connections between them and its steelmakers and other suppliers. A leaked U.S. Navy presentation noted that China’s shipyards have a capacity of 23.4 million tons, more than 232 times the capacity of the U.S.’s total shipyard capacity of 100,000 tons. Its shipyards made $87 billion in revenues in 2023 as they underbid shipyards in South Korea, Japan and Taiwan. China now has a 50 percent global share of all shipbuilding output, and its yards are projected to receive 55 million tons of orders in 2024.
China already has the world’s largest navy, although most of its fleet consists of smaller vessels. The depth of experience its shipyards are gaining will be a strategic asset far into the future. Throughout history, any country that has aspired to be a maritime power has had to support its shipyards one way or another—either through direct subsidies, protective cabotage laws like our own Jones Act, tariffs, steady contracts for government vessels or some mix of all of these.
U.S. shipyards are not directly subsidized, but they could be better supported simply by more consistent and regular spending by Congress. Congress’ “boom and bust” funding cycles constitute one of the most persistent challenges to shipyard stability and ability to chart the future. Just look at how long one single Coast Guard icebreaker has been debated in Congress.
The U.S. shipyard industrial base remains vital to America’s economic as well as military security. The private U.S. shipbuilding and repair industry supports more than 100,000 direct shipyard jobs across the United States, produces $7.9 billion in direct labor income and contributes $9.8 billion in direct GDP to the national economy.
The U.S. Navy is still considered the world’s most powerful. In 2020, former U.S. Secretary of Defense Mark Esper said that even if the U.S. were to stop building ships, it would take years for China to catch up. As recent events in the Persian Gulf and elsewhere have shown, the U.S. Navy still guards the world’s shipping routes. But our strength as a nation is defined not just by our military capabilities, but also by our ability to support critical industries like shipbuilding. President Biden is fond of proclaiming “whole of government” initiatives to address various goals like climate change. Perhaps we need a “whole of government” initiative to address shipbuilding and national security.
