Foreign buyers are the primary source driving shipbuilding production in China, with Taiwan-based Evergreen Marine Corp (長榮海運) being one of them especially concerning, the Center for Strategic and International Studies (CSIS) said.
In its 69-page report Ship Wars: Confronting China’s Dual-Use Shipbuilding Empire published on Tuesday last week, the Washington-based think tank said much of the production was carried out at tier-1 and tier-2 shipyards.
The CSIS study categorizes each of the 307 Chinese shipyards active from 2019 to last year into four tiers that reflect their degree of integration with China’s military industrial ecosystem, with tier-1 being “very high risk” while tier-2 means “lower risk.”
Photo: Reuters
‘STRIKING’
More than 75 percent of the production at these shipyards were sold to for firms based outside of China or Hong Kong, including US military allies such as Denmark, France, Japan, South Korea, and most strikingly Taiwan, the CSIS said.
“Taiwan’s position as a top client of China’s naval shipyards is particularly striking, given the direct threat the PLAN’s [Chinese People’s Liberation Army Navy] rapid expansion poses to the island’s security,” it said.
Citing Evergreen, the largest container cargo shipper in Taiwan, the CSIS said that 15 percent of its active fleet was built at tier-1 shipyards, with more on order.
RISKS
Many of those orders have gone to tier-1 shipyards such as Hudong-Zhonghua and Jiangnan, which are the same facilities that produce warships explicitly designed to support the PLAN in conducting amphibious assaults or other military operations across the Taiwan Strait, it added.
While companies buy vessels from China due to their lower costs, “governments should balance the potential benefits of cost savings with the risk of contributing to China’s naval development,” the CSIS said.
Tier-1 shipyards receive substantial state funding and contracts, ensuring a steady stream of resources to fuel rapid production, the think tank said.
As such, “these dual-use facilities blur the line between commercial and military activity, leveraging their infrastructure and output to accelerate naval production,” it added.
The CSIS advised Washington to encourage its allies to take quiet, informal actions to discourage their companies from buying from tier-1 shipyards.
“This is particularly true of Taiwan, as it stands to lose the most from China’s ongoing naval modernization,” it said.
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