China is leveraging its commercial shipbuilding industry, now the largest in the world thanks to foreign clients including Taiwan, to support its naval military expansion through “military-civil fusion,” a recent report by a Washington think tank said.
Washington’s Center for Strategic and International Studies (CSIS) released a report earlier this month titled “Ship Wars: Confronting China’s Dual-Use Shipbuilding Empires.”
The report analyses the close ties between China’s commercial and military shipbuilding, focusing “on the role that foreign firms are inadvertently playing in facilitating the expansion and modernization of the PLAN [Chinese People’s Liberation Army Navy].”
Photo courtesy of Wikimedia Commons via CNA
The initiative is largely driven by China State Shipbuilding Corp (CSSC), which has “deliberately blurred the lines between its commercial and military shipbuilding operations,” the report said.
The report categorizes Chinese shipyards into four tiers, from high-risk CSSC-owned shipyards known to produce warships for China’s navy as Tier-1 to low-risk private shipyards with limited documented military involvement as Tier-4.
More than 75 percent of ships produced at Tier-1 and Tier-2 shipyards are exported outside of China, largely to US military allies including Taiwan, Japan, South Korea and European countries, the report said.
“By purchasing vessels from these yards, foreign firms have funneled billions of dollars of revenue into entities that are central to China’s naval modernization,” it said.
These commercial revenues “effectively subsidize China’s naval expansion” enabling “Chinese shipyards to scale military production more efficiently and at lower marginal expense,” it added.
The report said that “Taiwan’s position as a top client of China’s naval shipyards is particularly striking,” as China’s naval expansion poses a direct threat to Taiwan’s national security.
Many of the Evergreen Marine Corp’s orders have gone to Tier-1 shipyards that also produce “warships explicitly designed to support the PLAN in conducting amphibious assaults or other military operations across the Taiwan Strait,” it said.
Fully 15 percent of Evergreen’s current active fleet was built at Tier-1 shipyards with more on order, it added.
In addition, foreign clients have “provided China’s defense contractors with key dual-use shipbuilding technology” that has been crucial in enabling China’s navy to overcome technological hurdles, the report said.
The US needs to work with other countries to tighten technological restrictions, ensuring that key dual-use technologies do not directly contribute to strengthening China’s naval capabilities, it said.
The US government should incorporate shipbuilding into its strategic framework and “use targeted diplomacy to encourage other countries to limit ties with China’s dual-use shipyards,” it said.
As many non-US companies rely on Chinese shipbuilding due to its efficiency and low cost, global coordination is essential to reduce support for shipyards tied to China’s military ambitions, it added.
This is especially crucial for Taiwan, as the modernization and expansion of the Chinese navy poses the greatest threat to its national security, the report said.
Additional reporting by CNA
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