Is the U.S. Falling Behind in the Shipbuilding Race with China?

Shipbuilding is fast emerging as a critical front in the strategic competition between the United States and China. This sector not only plays a pivotal industrial and military role but also has direct implications for global supply chain control and maritime presence. While China leads the world in shipbuilding volume, cost-efficiency, and delivery speed, the United States is increasingly seen as facing a capacity crisis marked by high costs and significant foreign dependence.

 

1. China’s Dominance?

 

In 2024, China accounted for 55.7% of global shipbuilding output, secured 74.1% of new orders, and held over 63% of ongoing construction contracts. It is currently the only country capable of building aircraft carriers, large liquefied natural gas (LNG) carriers, and cruise ships - three high-tech hallmarks of the industry.

 

A cornerstone of China’s strategy lies in its “military-civil fusion” approach, where its shipbuilding industry functions under an integrated model that serves both commercial needs and the modernization of the People’s Liberation Army Navy (PLAN).

 

Moreover, Beijing maintains tight state control through the merger of its two largest state-owned shipbuilding conglomerates, while simultaneously offering preferential credit, export insurance, and direct subsidies to upgrade technology and expand capacity.

 

2. U.S. Lagging Behind?

 

The United States currently accounts for less than 0.1% of global shipbuilding output. Despite a significant surge in the U.S. Navy's 2025 shipbuilding budget - 46% higher than the five-year average - most programs are plagued by delays and cost overruns. The Virginia-class Block V submarines are reportedly 40% behind schedule, while the Columbia-class (a cornerstone of the U.S. nuclear deterrent) faces at least a one-year delay.

 

Several structural bottlenecks hamper U.S. shipbuilding capacity, including: (1) Outdated infrastructure and chronic underinvestment; (2) Segmentation between civilian and military sectors, resulting in inflexible supply chains; (3) A labor crisis marked by low workforce productivity compared to Asian competitors.

 

Compounding the issue is the Jones Act (1920), which mandates that domestic shipping must be U.S.-built and operated. While aimed at preserving maritime security, the law has also been criticized for inflating costs and stifling innovation.

 

In response, the U.S. has introduced the Ships for America Act (December 19, 2024; reintroduced on April 20, 2025), which seeks to lay the groundwork for a national maritime strategy - a potential turning point in Washington’s attempt to compete with Beijing in the shipbuilding arena.

 

3. Comparative Metrics

 

In terms of output, China’s current production capacity is 232 times greater than that of the United States. One Chinese shipyard alone built more ships in 2024 than the entire U.S. industry did in the post-World War II era.

 

Regarding cost, U.S.-built ships can be up to six times more expensive than Chinese equivalents. For example, a 3,600-TEU container ship costs $333 million in the U.S., compared to just $55 million in China.

 

Regarding speed, Chinese shipyards can deliver a large container vessel in 13 months, whereas U.S. yards take 24 to 36 months, with productivity estimated to be 40–60% lower.

 

Regarding supply chain, the U.S. remains heavily reliant on foreign suppliers - especially China, South Korea, and Japan - and lacks strategic autonomy in key components and raw materials.