Could anyone ease China's tight grip on global shipping?

China’s grip on global maritime transport, anchored by a vast network of ports on every continent except Antarctica, is so extensive that rivals may need a full generation to catch up. This dominance has left the US, Europe and Asia in an increasingly uncomfortable position, reliant on Chinese ships, ports and logistical systems while seeking ways to reduce that dependence.

The “collective West” has realized that it must undergo rapid structural, financial and technological adjustments to lessen Beijing’s leverage over critical supply routes, according to an assessment by the Nikkei Asia publication. It also points to historical precedencies, recalling that nations unable to build and command their own fleets have struggled to project power or safeguard trade.

China’s advantage extends beyond ports. The country commands about 90% of the global rare-earths refining capacity — materials vital to industries that together account for about 10% of global GDP. Similar concerns are now directed at maritime transport, given that roughly 80% of world goods move by sea.

For years, China became the low-cost, default provider for a shipping industry that Western economies neglected, distracted by higher returns in technology sectors. That miscalculation is now glaring: last year, China secured 74% of all global orders for commercial ships, compared with just 0.2% for the US, data from Veson Nautical shows. South Korea and Japan held 30% and 10%, respectively.

China also leads in the production of steel plate for shipbuilding, propellers, marine engines, electronic navigation systems and dry dock machinery. Roughly 95% of all shipping containers are manufactured by Chinese companies.

As researchers in the International Journal of Scientific Research and Technology note, “Government support to the Chinese shipbuilding industry is one of the key reasons that China is able to outperform.” Beijing’s subsidies, industrial planning and close coordination between civilian and military sectors enabled Chinese firms to grow rapidly while mitigating risk.

Nikkei Asia stresses that China’s dominance is strengthened by the scale and integration of its ecosystem — deeply connected industrial processes, synchronized with government strategies to secure sea lanes, port access and global market share.

Is catching up to China's mighty ecosystem realistic?

Building a competitive alternative, considered essential to the geopolitical and economic interests of China’s rivals, would be slow and extraordinarily expensive. Shipbuilding in the West can cost up to five times more than in China, and major gaps in labor and material costs cannot be closed easily. New supply chains must be built, and robotics and other advanced technologies would need large-scale expansion.

These hurdles are compounded by conflicting maritime priorities within Western alliances, disagreements over defense versus commercial needs, and the drain on public funding from AI data center investments, semiconductor manufacturing and social welfare spending. Global economic interdependence further complicates any attempt to “de-risk” from China.

Washington’s position

US–China tensions eased slightly after Presidents Donald Trump and Xi Jinping met in South Korea earlier this year. The two agreed to a one-year pause on US port fees, saving China an estimated $3.2 billion annually. Washington also agreed to delay its Section 301 investigation into China’s maritime practices in exchange for Beijing removing retaliatory measures against American-affiliated shipping firms.

With this temporary reprieve, attention has shifted to rebuilding Western maritime capacity. But Nikkei Asia argues this goal is unachievable in the short term. The US must first reassure allies of its long-term strategic commitments, since progress in commercial maritime capabilities hinges on solid defense partnerships at sea.

Washington has emphasized its Indo-Pacific presence through strengthened security agreements and joint exercises. Still, trade frictions leave Japan, South Korea and others wary, prompting them to pursue more flexible foreign policies. Uncertainty also remains over how the US would respond if China sought to obstruct vulnerable shipping routes.

The article urges the creation of a new “quad” — a strategic partnership among the US, the EU, South Korea and Japan — to spearhead a massive reindustrialization of shipbuilding. These four already collaborate on naval and commercial shipbuilding, but the scale of coordination required would be unprecedented, both internally within the EU and among the bloc's partners.

The four must develop capacity not only to build vessels but also to produce high-grade steel plate, marine engines, navigation systems and other key components. This requires sustained, decades-long investment and burden-sharing. Standardizing components such as hulls and propulsion systems would reduce costs, improve interoperability and speed up production, according to analysis from the RAND Corporation.

Nikkei Asia also highlights the need for shared standards in port cybersecurity, vessel tracking, logistics and emergency protocols to handle threats or attacks. With coordinated efforts, the proposed quad could narrow the gap with China significantly within five to 10 years — and aim for real parity within two decades.

“None of this is feasible as a collection of ad-hoc national policies and bilateral deals — the prevailing US approach. If the members of this new quad go their separate ways, they risk failure,” the article concludes.

By Nazrin Sadigova