Korean shipbuilders were outperformed by their Chinese competitors in exports last year, 11 years after Korea in turn overtook Japan in 2001.
The Korean Chamber of Commerce and Industry said that analysis of data from the Korea International Trade Association puts exports by Korean shipbuilders at US$37.8 billion in 2012, compared to China's $39.2 billion.
The outcome is due to the fact that the Korean industry was more affected by the global economic downturn than China. Korean shipbuilders saw exports decrease around 30% on-year in 2012 while their Chinese and Japanese rivals posted drops of only 10.3% and 14.6%.
The shipbuilding industry has been one of Korea's mainstay exporters. Since the mid-2000s, it enjoyed a boom and grew to post US$54.1 billion in exports in 2011. But China recently has been putting up strong fight. Korea managed to edge slightly ahead of China in terms of global orders last year, when it accounted for 35% compared to China's 33.3%.
Industry insiders cite Chinese government support as the reason for the rapid growth of Chinese shipbuilders despite shortcomings in technology.
A KCCI report to the Ministry of Strategy and Finance called for support from the banking sector to overcome the current slowdown. It said such support is all the more necessary because of a shift in payment practices. Previously, the total price was paid in five installments of 20% each until delivery, but now only 40% of the total price is paid in four installments during construction and the remaining 60% on delivery.