HSBC: China Shipyards Remain Strong Despite U.S. Shift

Non-Chinese shipowners can breathe easier, as most vessel orders in China remain a low-risk option, following a softened stance by the U.S. Trade Representative (USTR) on penalties targeting Chinese-affiliated shipping. HSBC has stated that Chinese shipyards retain their competitive edge.

“The diluted port fees will reduce the uncertainty on newbuild decisions for non-Chinese carriers which should be positive for Chinese shipyards,” HSBC commented. As reported, Mediterranean Shipping Co (MSC), the world’s largest containerline, was quick to respond—placing an order for six 22,000 TEU vessels with Hengli Heavy Industry in China.

The USTR’s revised approach comes after widespread criticism during a recent public hearing. Initially proposed harsh penalties have now been eased, particularly for non-Chinese shipowners. HSBC noted this move diminishes the competitive advantage Korean shipyards briefly gained under the original proposal.

“We continue to expect Chinese yards to maintain their leading position in most vessel segments,” HSBC said in a shipbuilding sector update. The bank expects order activity at Chinese yards to pick up again, especially given the pricing gap that has formed between Chinese, Korean, and Japanese shipbuilders.

However, Greece-based Xclusiv Shipbrokers pointed out lingering uncertainty: “While the [USTR] announcement is thorough, its vague language creates uncertainty, making it difficult to assess the full scope and implementation of the proposed fees.”

A final decision on the port fees is pending a scheduled public hearing on May 19. If implemented, the new charges are expected to be phased in gradually over three years, beginning October 14.