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Wednesday, September 19, 2018

OECD industry hearing on establishing normal competitive conditions in world shipbuilding

The hearing included a Chinese submission stating that ‘We believe it is necessary for developing shipbuilding countries to construct new or expand existing shipbuilding facilities to meet the demands from their own nation as well as from foreign shipowners. Possible new agreements should consider the balance between the rights and obligations of developing economies and should pay more attention to the requests of developing shipbuilding nations.’

The S Korean submission concluded that price trends, whilst generally downwards in USD terms, have been more stable or even upward in local currency terms, reflecting the strengthening of the US dollar against most shipbuilding currencies. China and Poland have significantly improved their positions in the world market and Eastern European or former planned economy countries may provide further increases in capacity in countries which have a significant labour cost advantage.

The Japanese submission stated that the global shipbuilding market as it is today has a structure which prevents the market mechanism from functioning normally due to government subsidies and other unfair practices. In particular government subsidies to relieve companies in financial crisis are seriously distorting the market.