Summary of Key Points
China's shipbuilding industry has established an absolute dominant position globally, accounting for over 60% or even 82% of both completed vessel shipments and new orders worldwide. For the first time, China has surpassed South Korea in LNG ship orders, which were previously dominated by South Korea. In contrast, the U.S. shipbuilding industry has seen a severe decline, with only a 0.04% share of the global market. To challenge China, the U.S. is attempting to pivot to nuclear-powered merchant ships and is using subsidies, technology transfer from allies, and rule modifications to try to revive its shipbuilding sector. However, China is not static; it has made investments in green ship technologies such as LNG, methanol, and ammonia, as well as in nuclear power, making it difficult for the U.S. to close the gap in the short term.
I. China's Shipbuilding Industry: From "Tonnage King" to "Technological Leader," Leading the World
China's shipbuilding industry is no longer just about competing on price and tonnage. Data from the first half of 2026 shows:
- Dominating in Scale: 36.5 million deadweight tons of completed vessels (62.2% of the global total), 120 million deadweight tons of new orders (82.3% of the global total), and a leading position in outstanding orders;
- Technological Breakthrough: For the first time, China has received more LNG ship orders (34) than South Korea (32), indicating that China has mastered the most advanced shipbuilding technologies;
- Leading in Green Transformation: Two out of every three green ship orders globally go to China, covering mainstream low-carbon options such as LNG dual-fuel, methanol, and ammonia.
In short, China's shipbuilding industry is both large and strong, outperforming its competitors in both quantity and quality.
II. Why Is the U.S. Betting on Nuclear-Powered Merchant Ships? Changing the Game Plan Is the Only Option
The U.S. shipbuilding industry cannot catch up with China in its traditional areas (with costs four times higher than the international market and a market share of only 0.04%). Therefore, it is focusing on nuclear-powered merchant ships as a strategy to overtake China. There are two main reasons for this:
1. Technological Foundation: The U.S. built the world's first nuclear-powered merchant ship, the *Savannah*, in 1959, and has a solid understanding of nuclear-powered ship technology;
2. Economic Opportunities Driven by Emissions Reduction: The International Maritime Organization aims for net-zero emissions in shipping by 2050, and the EU has included shipping in carbon trading, requiring ships to purchase carbon emission allowances. Nuclear-powered ships have near-zero emissions and require less refueling, making them economically viable when considering carbon costs.
The U.S.'s goal is not just to build ships but to establish a complete system from nuclear reactors to port access and insurance, in order to gain control over new market regulations.
III. How Weak Is the U.S. Shipbuilding Industry? It Even Has to Outsource Warships
The decline of the U.S. shipbuilding industry is so severe that it is in a state of emergency:
- Dismal Market Share: Only 0.04% of global completed vessel shipments in 2024, down from 0.1% in 2023;
- Exorbitant Costs: The same type of merchant ship costs $200 million to $400 million in the U.S. compared to $50 million to $100 million internationally;
- Losing Talent and Supply Chain: Fewer orders lead to smaller shipyards, higher costs, which in turn result in more staff and supplier departures, creating a vicious cycle;
- Incapable of Building Warships: The White House has acknowledged backlogs in naval shipbuilding projects, and Trump even allowed foreign shipyards to build U.S. warships (for example, Finnish shipyards building icebreakers), with the condition that foreign companies transfer technology and supply chains to the U.S.
In essence, the U.S. shipbuilding industry is on the brink of collapse and relies on government funding and alliances to survive.
IV. China Is Not Resting on Its Laurels: Diversifying into Green Ship Technologies
China has already made investments in multiple areas:
- LNG Dual-Fuel: This technology is applied to various ship types, including containers, bulk carriers, and oil tankers. The world's largest LNG dual-fuel cargo ship delivered in 2026 is a testament to this;
- Methanol Power: The world's largest 24,000 TEU methanol dual-fuel container ship, the *Dongfang Zhihui*, has been delivered and is in use on trans-Pacific routes;
- Ammonia Fuel: China has successfully completed the world's first ammonia fuel refueling and tested a commercial ammonia engine, which will soon be installed on a 210,000-ton bulk carrier;
- Dual-Fuel Flexibility: Many ships are designed with the option for conversion, allowing them to use fuel or LNG, or in the future, methanol or ammonia, to avoid investing in outdated technologies;
- Nuclear Power Reserves: Jiangnan Shipbuilding released a nuclear-powered container ship design in 2023, which has obtained international certification. Although not yet in commercial use, this technology is not neglected.
China's strategy is to diversify its offerings so that it can adapt to whatever fuel becomes the mainstream in the future.
V. Can the U.S. Realize Its Nuclear Power Dream? The Foundation of the Shipbuilding Industry Is Crucial
The U.S. hopes to overtake China with nuclear power, but there are significant barriers:
- Nuclear-powered ships require not only reactors but also docks, skilled workers, and a supporting supply chain (such as nuclear fuel processing and port facilities), which the U.S. has lacked for decades and cannot rebuild quickly;
- The U.S. does not have the necessary regulations for nuclear-powered ships, including approval processes, insurance, and port access;
- Even if technology is transferred, without the necessary workforce and supply chain, it will be of little use.
However, the U.S.'s actions are noteworthy: it is creating demand through government orders (such as funding Hanwha Shipbuilding to build missile ships), supporting shipyards with subsidies, and using regulations to protect domestic capacity. Although the situation is not yet critical, the U.S. is taking steps to boost its shipbuilding industry.
Conclusion: The U.S. is trying to change the game with nuclear power, but the core competitiveness of the shipbuilding industry lies in scale, talent, and supply chain, which cannot be quickly acquired through technological breakthroughs. As long as China maintains its current pace and continues to invest in green technologies, it will be difficult for the U.S. to challenge China's leading position. However, we must also be vigilant, as the U.S.'s national-level efforts could pose new challenges in the future.