Tuesday, September 27, 2022

Boasting World’s Biggest Naval Power – How Key US Ally Taiwan Has Been Aiding China’s Shipbuilding Industry & Its PLA Navy

China boasts the world’s largest navy numerically after overtaking the US Navy sometime between 2015 and 2020. Surprisingly, one of the important contributors to this success is a Taiwanese shipping company, according to a report by a premier American think tank based in Washington.

China’s commercial shipbuilding industry, the largest in the world, for years has been engaged in the rapid build-up of ships across its shoreline, and over the years, through foreign contracts it has also acquired the capital and technological know-how to construct increasingly sophisticated models of all types of naval ships and weapons systems, thereby subsidizing and supporting the military shipbuilding efforts of the country.

According to the Centre for Strategic and International Studies, Taiwan’s leading shipping company, Evergreen Marine Corp has purchased 44 vessels from China since 2018 all but two of which were ordered from shipyards that also produce Chinese warships, such as those of China State Shipbuilding Corp (CSSC), top state-owned shipbuilding firm.

CSSC is one of the essential enterprises for China’s ‘military-civil fusion’ (MCF) strategy which involves combining the military, civilian and commercial resources of the country to promote China’s all-inclusive national power.

Commercial satellite imagery from February 2022 cited by CSIS showed at least three Evergreen hulls under construction at Jiangnan Shipyard where China’s third and most capable Type 003 aircraft carrier is also being constructed.

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Chinese Type 003 Aircraft Carrier under construction at Jiangnan Shipyard (CSIS)

Furthermore, in the imagery from over a year before, another Evergreen vessel can be seen docked near two Type 055 cruisers and a Type 052D destroyer.

The imagery “suggests there is direct sharing of resources between military and civilian operations at China’s key shipyards,” CSIS said.

China views Taiwan as a breakaway province, which must be reunited with the mainland, if required, by force. Amid such a threat, it should be of huge concern to Taipei that Taiwan’s top-ranking shipping company is pouring money into shipyards assembling the very warships that may be used to forcefully reunite the island nation with China.

In addition to Jiangnan, there are three other shipyards operated by CSSC subsidiaries – Dalian, Hudong-Zhonghua, and Huangpu Wenchong – which collectively produce scores of surface combatants for the People’s Liberation Army Navy (PLAN) and attract shipbuilding contracts in the millions (and sometimes billions) of dollars from companies based outside of China and Hong Kong.

As per the data collected by CSIS, between 2019 and 2021, these four CSSC-owned shipyards received contracts for at least 211 commercial vessels out of which, 64 percent were from foreign companies such as Evergreen.

Apart from Evergreen, CSIS pointed out some other foreign firms from democratic countries allied with the U.S. such as CMA CGM, a French shipping titan that has awarded at least 46 contracts worth several billion dollars to a handful of Chinese shipyards since 2017.

These orders include some of the world’s largest container ships powered by liquified natural gas (LNG), many of which were built at Jiangnan.

Moreover, a French multinational naval engineering company Gaztransport & Technigaz SA (GTT) which also shares close ties with CMA CGM, has entered into several technology transfer agreements with Chinese Shipbuilders.

French multinational naval engineering company Gaztransport & Technigaz SA (GTT) has entered into several agreements to make its technology available to Chinese shipbuilders.

According to reports released by GTT, over two dozen of the ships that CMA CGM ordered from Jiangnan and Hudong-Zhonghua since 2019 utilized GTT technology.

Switzerland’s Mediterranean Shipping Company, the largest container shipping company in the world in terms of cargo capacity, ordered three container ships from Dalian in March 2021 and another six in January 2022. Dalian shipyard is known to produce Type 55 Renhai-class cruisers and Type 52D Luyang III-class destroyer ships.

Dalian Shipbuilding Industry Company - Wikipedia
Dalian Shipbuilding Industry Company – Wikipedia

Even Japanese companies such as Kawasaki Kisen Kaisha (K-Line) and Mitsui OSK Lines have ordered 13 LNG carriers from China since 2019, despite Japan being a leading player in the global shipbuilding industry. Eleven of these vessels are going to be constructed at Hudong-Zhonghua, where China built its first three Type 075 amphibious assault vessels.

The opaque nature of China’s business environment offers limited transparency into the flow of capital within the shipbuilding industry but profits from foreign contracts can certainly help in bringing down the burden of research and development costs on the Chinese State for developing new weapons platforms.

Workers trained to construct commercial vessels can transfer some of their skills when working on PLAN warships and access to foreign commercial technology may help China innovate in the military domain.

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