China and the Maritime Shipping Industry

China now possesses the world’s largest navy in terms of warships, 234 to the USN’s 219, remembering that this is strictly a warship count of those ships greater than 1000 tons.  It should also be noted that Chinese warship production outstrips USN warship production significantly; of note, China has 230 times the ship building capacity of the US.  This is significant not only from the perspective of new builds but it provides China with a strategic advantage in terms of being able to repair ships damaged due to conflict.  A comparison of firepower based on missiles – the USN has roughly 9900 VLS (vertical launch system) cells across its fleet whilst China’s People’s Liberation Army Navy (PLAN) has roughly half that number.  However, recent studies and predictions have the PLAN surpassing the USN by about 2027.  It is not all doom and gloom, and the USN still retains a strategic advantage in terms of experience and overall tonnage.  But, this is only one part of the puzzle that is the PLAN.  That number of ships does not include the Chinese Coast Guard and the swarms of small maritime vessels that the PLAN routinely employs to disrupt maritime traffic in the South China Sea (SCS) as it continues to control that body of water and beyond.

From a commercial shipping perspective China owns the largest number of container ships in the world, which means that they can seriously impact global commercial shipping if they so desire.  China and Greece ship owners control 34% of the global fleets cargo carrying capacity.  Chinese shipyards currently have 61% of the global order book for container ships.  A statistical distribution of vessels in the global merchant fleet in 2021 by owning country (https://www.statista.com/statistics/1284460/share-of-merchant-ships-worldwide-owning-country/) shows that Greece is the largest owner closely followed by China as of 3 years ago. November 2021 total fleet values include the vessel types covered by Vessels Value (https://www.vesselsvalue.com/): bulker, tanker, container, reefer, small dry, LNG, LPG, vehicle carriers, RoRo, cruise, OSV, OCV, MODU and CTV.¹  China owns the largest number of containerships and, consequently, the recent surge in rates and values has moved them up the ranks to the top spot in terms of overall fleet value.

This provides only a small window on the state of global maritime shipping in terms of vessels, but it provides context to a larger issue within the maritime domain.  China’s foray into commercial ports (the idea of “The String of Pearls”), and their subsequent taking advantage of countries with ports that are falling into disrepair, offering monetary loans to take them over, particularly within the Indo-Asia Pacific (IAP), clearly indicates the paradigm of “salami slicing” in terms of eventually becoming the leader in all things maritime.  The Chinese are, if nothing else, long-term planners.  Unlike the West which typically works along the lines of electoral voting – roughly every 3 to 4 years – their planning cycle works in terms of decades, slow and deliberate.  The example of their buildup in the SCS provides the clearest example of this deliberate planning. 

Thus, as with the SCS buildup of man-made islands, the Chinese influence within the shipping industry is significant and the likelihood of China becoming a global maritime commercial juggernaut is very real.   This should very much be of concern to the West and, although studied, has only resulted in academic alarm bells but arguably no real foreign policy push back.  Importantly, this has not really raised the issue of maritime domain awareness in individual countries beyond that which is the current norm, piracy, commercial overfishing, etc., or industrial push back from the US or others.

Closer to home for Canada, there must be a realization of the impact that the Chinese perspective on international maritime law is not aligned with western beliefs.  See the past decision on the Philippines versus China regarding maritime law.  For Canada, regardless of what this paradigm shift could mean in terms of supply chain, the Chinese belief that, for instance, the Arctic belongs to no one and should be considered a global asset is concerning for Canadian claims regarding sovereignty with the Canadian Arctic Archipelago.  What is clear is the Chinese hold little regard for North American or Arctic Council edicts as they continue to push for control of and within the maritime domain.  All this said, the hegemonic approach that China is presenting should be a serious concern to Western interests and particularly to Canada.