In the recent report of China Association of the National Shipbuilding Industry (CANSI), the Association indicates that industrial index of China's shipbuilding-related companies above certain level has maintained over 20% growth rate in the first half of 2011. However, increases of production and profit have slowed down due to low shipbuilding margin after the financial crisis.

The report also points out Chinese shipyards is maintaining the growing trend in H1 only by the massive high-value vessels won before the crisis which scheduled to be delivered between 2011-2012.

In this period, the ship-related companies’ total Industrial production value increased 24.8% to CNY 377.4bn ($58.3bn), of which shipbuilding accounting for CNY 293bn with gaining a 25.2% rise. CANSI forecasts the growth in H2 would be lower than that of H1.

The report predicts that Chinese shipyards would face delivery predicament in the second half of the year, especially in bulker and tanker sectors.

Meanwhile Chinese shipyards begin to see declining orderbook with newbuidling output exceeding new orders received.

The decreasing newbuild price, yuan appreciation, high interest rate, increasing material and labor cost, new international shipbuilding regulations and standards jointly depress shipyards’ profit margins. Besides, the global ship financing loans contraction further deteriorates the conditions.

As countermeasures against current problems of Chinese shipbuilding industry, CANSI emphasizes to increase investment on R&D for shipbuilding and offshore plants, enhance understanding of new international standards, raise shipbuilding capability by M&A, etc.