U.S. is “Frighteningly Behind” in Shipbuilding Thanks to China’s Unfair Practices, AAM President Scott Paul Tells Congress

Alliance for American Manufacturing President Scott Paul.

Testifying before the House Select Committee on the Chinese Communist Party, Paul urges the panel to support relief measures aimed at getting things back on track.

Alliance for American Manufacturing President Scott Paul warned Members of Congress on Wednesday that China's dominance in global shipbuilding poses an immense economic and national security threat to the United States.

Paul appeared as a witness before the House Select Committee on the Chinese Communist Party (CCP) at a hearing examining China's strategy to "dominate semiconductors, shipbuilding, and drones." Paul focused much of his attention on commercial shipbuilding, a sector that has become nearly obsolete in the United States thanks to decades of little-to-no investment and a litany of unfair trade practices by China.

"The largest obstacles to shipbuilding in the Untied States are the unfair trade practices of China," Paul testified. "While no nation should be faulted for seeking to develop maritime capabilities, Beijing's ambitions go well beyond that. China's shipbuilding capacity has been turbocharged through a series of efforts aligned with Five-Year Plans dating back more than two decades."

The statistics are startling. Back in 1975, the United States employed 180,000 people in the industry and secured more than 70 commercial ship orders annually. But much of that is depleted; the number of major commercial shipyards in the United States has fallen to just seven.

The U.S. now makes 10 oceanic commercial vessels a year; China deploys more than 1,000. China also has more than 5,500 flagged merchant vessels in oceangoing service, while the U.S. has fewer than 80.

A leaked slide from the U.S. Navy showed that China's shipbuilding capacity is now 232 times greater than that of the United States. "Things are so bad that our own Navy must rely on Chinese-made dry docks in certain circumstances."

To get things back on track, the United States must be willing to take on China's bad practices. Paul encouraged committee members to support the proposed relief measures put forth in a "Section 301" trade filing by the United Steelworkers (USW) and a coalition of labor unions. The U.S. Trade Representative is currently investigating China's practices in the shipbuilding sector, with findings expected to be unveiled within a year.

Paul also pointed Members of Congress to the recommendations outlined in our recent report on China's overcapacity in several sectors, entitled SHOCKWAVES: The Ripple Effect of China's Industrial Overcapacity on American Manufacturing and Factory Workers.

"This effort merits your support because there are direct and indirect connections to shipbuilding in every state," Paul told the panel. "We must not allow our shipbuilding capabilities to continue to be victimized by the CCP's predatory domination of a sector critical to U.S. economic and national security."

Click here for Paul's oral testimony and here for his written testimony.

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