Leveraging international contracts, dual-use system and commercial policy, China’s state-backed manufacturing juggernaut is quickly outpacing the US Navy as it struggles with declining shipyards and proper uncertainty.
This month, the Center for Strategic and International Studies ( CSIS ) released a report detailing how China has become the world’s leader in shipbuilding, threatening US naval superiority in the Asia-Pacific and beyond.
According to the report, China has leveraged industrial policy and military-civil fusion (MCF ) to integrate commercial and naval production. CSIS says the China State Shipbuilding Corporation ( CSSC), the world’s largest shipbuilder, has blurred the lines between civilian and military sectors, fueling the People’s Liberation Army Navy’s ( PLAN ) expansion while benefiting from foreign contracts and capital.
The document states China’s manufacturing network operates under a structured structure, with high-risk CSSC-owned feet producing business vessels and warships usually funded by foreign clients.
It points out that over 75 % of ships from these yards are sold to foreign buyers, indirectly subsidizing China’s naval build-up. It says that European and Asian companies, including Taiwan’s Evergreen Marine, have de facto channeled billions into CSSC’s dual-use system.
The CSIS record mentions international entanglements extend beyond send requests. It points out that Western firms have supplied critical technologies, such as marine engines, gas turbines and liquid natural gas ( LNG ) carrier designs, enabling China to overcome key military-industrial hurdles. It even says Chinese shipbuilders also entry global financial markets, securing foreign investment despite US restrictions.
Putting figures on China’s shipbuilding dominance over the US, an August 2024 US Congressional Research Service ( CRS ) report assesses that China has 230 times the shipbuilding capacity of the US, enabling it to have the world’s largest navy. China’s battle force comprises 370 ships and submarines, with more than 140 major combatants, according to the 2024 US Department of Defense ( DOD ) China Military Power report.
In contrast, US Senator Roger Wicker mentioned in a May 2024 reading before the US Senate Armed Forces Committee that the US Navy is very little and old to meet the demands of US fight officers and national security plan. As of March 2025, the US Naval Vessel Register ( NVR ) says the US has 295 ships, far smaller than the PLAN.
Outlining the PLAN’s probable fleet size development trajectory, US Senator Dan Sullivan said in the same receiving that by 2025, the PLAN will include 395 boats and will increase to 435 ships by 2030 – 141 more than the US Navy.
That places the US Navy in a perilous proper position. In a January 2023 content in Proceedings, Sam Tangredi argues that factual data from 28 marine problems shows fleet size usually outweighs modern advantages.
Tangredi points out that in 25 instances the larger ships emerged victorious, suggesting that large size usually outweighs short-lived modern advantages. He asserts that greater numbers increase scouting capacity, freedom and dramatic power, as demonstrated in the Napoleonic Wars and World War II periods.
He points out that strategies like the US Navy’s 600-ship Cold War plan reflect these principles, while smaller, tech-savvy forces typically failed to compensate for being outnumbered.
On how US naval shipbuilding declined, Peter Lee mentions in a 2024 Asan Institute for Policy Studies report that US naval shipbuilding faces chronic delays, with major programs such as the Ford-class aircraft carrier and Virginia-class submarines running years behind schedule. Lee says a dwindling labor force and inconsistent government demand have exacerbated the problem.
He also notes that US commercial shipbuilding has collapsed, currently accounting for less than 1 % of global output. Lee says it has been crippled by the century-old Jones Act, which inflates domestic shipping costs while stifling competitiveness.
He says China’s shipbuilding dominance is backed by aggressive state subsidies, a strategy the US has resisted. Lee mentions that while protectionist laws prevent outsourcing naval shipbuilding, deregulation in the 1980s decimated the private sector, forcing reliance on foreign-built vessels.
The US has three options to reverse this trend: revamping its shipbuilding industry, utilizing unmanned platforms or tapping comparatively robust allied shipyards in Japan and South Korea. Each approach has advantages and disadvantages.
The Trump administration unveiled the” Make Shipbuilding Great Again” initiative in February 2025 to rejuvenate the US shipbuilding industry at China’s expense. The program requires a comprehensive maritime action plan that a new White House maritime office will manage within six months.
Key elements of the plan include tax incentives, a Maritime Security Trust Fund and maritime opportunity zones. It also aims to reform acquisition processes and tackle workforce issues, including by raising wages for shipyard workers.
However, in a February 2025 US Senate Armed Forces Committee hearing, Wicker says that pouring money into US shipbuilding woes won’t work, as the US doesn’t have the industrial base to support a surge in shipbuilding.
Moreover, a January 2025 US Congressional Budget Office ( CBO ) report mentions that the US Navy’s 2025 shipbuilding plan faces significant challenges due to escalating costs and production delays.
The report says while the US Navy aims to expand its fleet to 390 ships by 2054, aging shipyards will struggle to meet demand. It adds that labor shortages, supply chain disruptions and rising material costs hinder progress.
Unmanned Surface Vehicles ( USVs ) provide an economical solution for fleet expansion, allowing budget-constrained navies to deploy swarms of attack drones. Their ability to scale and enhance distributed lethality complements manned vessels make them more difficult for enemies to target while improving fleet resilience.
At the same time, harsh maritime conditions lead to faster mechanical wear. The fact that these vehicles depend on external communication links also makes them vulnerable to jamming and hacking, especially in scenarios dominated by electronic warfare.
Unlike crewed warships, they do not possess the endurance, firepower and versatility necessary for extended combat operations.
In March 2024, Voice of America (VOA ) reported that the US is looking to South Korea and Japan, the world’s second and third-largest shipbuilding countries after China, to revive US shipbuilding. According to VOA, US Secretary of the Navy Carlos Del Toro has recently visited shipyards in South Korea and Japan to meet shipbuilding executives.
Del Toro’s visit shows that the US has trouble building warships and that working closely with allies to build more warships or offload some maintenance tasks could help, the VOA report said.
However, Matthew Paxton argues in a March 2024 Defense News article that outsourcing US shipbuilding would further weaken the US industrial base, sideline US workers and undermine US sovereignty by ceding the ability to build ships to other states.
Paxton questions the usefulness of outsourcing US shipbuilding to allies when many of the shipbuilding capabilities touted by Del Toro during his visit to South Korea and Japan can be found in the US. But if the US fails to revive its shipbuilding industry, it risks ceding naval dominance to China, whose relentless expansion shows no signs of abating.