Shipbuilding is Naval Power

An Analysis of a US-China Naval War

The balance of naval power in the 21st century increasingly hinges on industrial capacity rather than technological superiority alone. Today’s comparison between Chinese and American shipbuilding capabilities reveals a strategic reality reminiscent of the industrial imbalances that defined naval warfare in World War II. China’s shipbuilding capacity is estimated to be 230 times greater than that of the United States, with Chinese shipyards having a manufacturing capacity of roughly 23.25 million tons compared to less than 100,000 tons for U.S. shipyards. This disparity represents one of the most significant shifts in global naval industrial power since the rise of American maritime dominance in the 20th century.

This analysis examines three critical dimensions: the current state of Chinese versus American shipbuilding capacity, the historical lessons from the U.S.-Japan naval competition during World War II, and the potential implications for modern naval warfare scenarios. The findings suggest that while technological advantages and operational expertise remain important, the sheer scale of China’s industrial capacity provides strategic advantages in any prolonged naval conflict, fundamentally altering the calculus of maritime deterrence and warfare.

Part I: Contemporary Shipbuilding Capacity Comparison

China’s Maritime Industrial Revolution

China dominates the global shipbuilding industry, producing over 70% of new orders in 2024, with seven of the world’s top ten shipbuilders being Chinese companies. This transformation represents what analysts describe as the most significant shift in maritime industrial power since the decline of European shipbuilding in the mid-20th century.

As part of its “military-civil fusion” strategy, China is tapping into the dual-use resources of its commercial shipbuilding empire to support its ongoing naval modernization. The China State Shipbuilding Corporation (CSSC), the world’s largest shipbuilder, exemplifies this integration. In 2024 alone, one Chinese shipbuilder constructed more commercial vessels by tonnage than the entire U.S. shipbuilding industry has built since the end of World War II.

China’s shipbuilding supremacy extends across multiple vessel categories:

Commercial Dominance: China secured 388 bulk carrier orders in 2024, accounting for 75% of global activity, and captured 74% of the global tanker market with 322 vessel orders. In container vessels, Chinese dominance is even more pronounced, with 259 vessels representing 81% of global activity.

High-Value Markets: Perhaps most significantly for naval implications, China overtook South Korea in the LPG carrier sector, securing 62 LPG carrier orders compared to South Korea’s 59, giving China a 48% market share. This represents a breakthrough into traditionally sophisticated shipbuilding markets previously dominated by South Korean and Japanese yards.

Infrastructure and Scale: China has “dozens” of commercial shipyards larger and more productive than the largest U.S. shipyards. China’s total shipbuilding capacity increased by 12% to 47.8 million deadweight tons in 2024, with most Chinese shipyards fully booked for the next three to four years.

American Shipbuilding Decline

The United States presents a stark contrast to China’s expansion. The United States has a relatively insignificant capacity at 0.13 percent of global shipbuilding output, compared to China’s 46.59 percent. This represents a dramatic fall from American maritime industrial leadership.

Historical Context: America reached the pinnacle of its shipbuilding history during WWII and continued to serve as the world’s leading shipbuilder for decades thereafter. But competition from subsidized foreign shipyards quickly eroded that lead, especially after U.S. shipbuilding subsidies expired in 1981.

Current Infrastructure: The United States currently boasts the same number of private shipyards capable of producing new warships as it did in 1933: just seven. In addition, the Navy’s four public yards are no longer available for new construction like the ten public yards were in 1933.

Production Rates: From 2012 to 2021, the U.S. fleet added an average of 10.1 new ships a year—even fewer than the inadequate 12.7 production rate before World War I. Although the Fiscal Year 2025 budget requested an increase in shipbuilding to $32.4 billion, the U.S. Navy requested only six new ships, instead of the seven ships projected, remaining below the 10 to 11 new ships needed each year over the next 35 years.

Capacity Constraints: Despite nearly doubling its shipbuilding budget over the last 2 decades, the U.S. Navy hasn’t increased its number of ships. The Virginia-class submarine program exemplifies these challenges: in June 2024, the program’s rate of production was at about 60% of its annual goal—putting it years behind schedule, with much of this delay resting on the shipbuilder’s capacity to meet construction deadlines due to workforce shortages.

Strategic Implications of the Capacity Gap

The shipbuilding disparity carries profound implications beyond simple vessel counts. China’s massive shipbuilding industry would provide a strategic advantage in a war that stretches beyond a few weeks, allowing it to repair damaged vessels or construct replacements much faster than the United States, which continues to face a significant maintenance backlog and would probably be unable to quickly construct many new ships or to repair damaged fighting ships in a great power conflict.

This industrial capacity translates into fleet expansion rates that favor China. The U.S. Defense Department estimated China’s naval fleet would grow from 395 ships in 2025 to 435 by the end of the decade, while the U.S. Navy’s fleet was projected to decrease to 285 ships by 2025 and slightly rebound to 290 by 2030.

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Part II: Historical Precedent – The United States vs. Japan in World War II

Pre-War Industrial Foundations

The naval competition between the United States and Japan during World War II provides crucial insights into how industrial capacity ultimately determines naval outcomes. Unlike today’s China-U.S. comparison, the pre-war situation showed rough parity in naval forces but significant differences in industrial potential.

Fleet Comparison at Pearl Harbor: The Japanese still had more warships of every category than the United States had in the Pacific and the Combined Fleet still possessed eight aircraft carriers, twice as many as the US Pacific Fleet. Additionally, while the United States did have three large carriers in the Pacific, in comparison to Japan’s two, the Japanese vessels had a total capacity for 382 aircraft, compared to 300 on the American carriers.

Recognition of Industrial Reality: The Japanese acknowledged that they would never have the industrial capacity to create a navy that was equal in size to the United States. The United States economic base was ten times larger than Japan’s, and its technological capabilities also significantly greater.

The Mathematics of Industrial War

The stark numerical realities of wartime production illustrate how industrial capacity shaped naval outcomes:

Carrier Production: In the three years following the Battle of Midway, the Japanese built six aircraft carriers. The U.S. built 17. Even if it had lost catastrophically at the Battle of Midway, the United States Navy still would have broken even with Japan in carriers and naval air power by about September 1943.

Overall Production: America launched more vessels in 1941 than Japan did in the entire war. Shipyards turned out tonnage so fast that by the autumn of 1943 all Allied shipping sunk since 1939 had been replaced. In 1944 alone, the United States built more planes than the Japanese did from 1939 to 1945.

Destroyer Production: Japan, an island empire totally dependent on maintaining open sea lanes to ensure her raw material imports, managed to build just sixty-three destroyers (some twenty or so of which would have been classified by the Allies as destroyer escorts) and an unspecified number of ‘escort’ vessels. In the same time span, the US put some eight hundred forty-seven antisubmarine capable craft in the water.

Strategic Lessons from the Pacific War

Industrial Mobilization: American industry provided almost two-thirds of all the Allied military equipment produced during the war: 297,000 aircraft, 193,000 artillery pieces, 86,000 tanks and two million army trucks. In four years, American industrial production, already the world’s largest, doubled in size.

The Role of Early Naval Assets: The ships that held the line against an ascendant Imperial Japan in 1942 were purchased and built during the interwar years. The Battle of the Coral Sea, Midway, and the Guadalcanal campaign were all fought with ships that made up the “peacetime navy.” This highlights the importance of maintaining naval strength before conflicts begin, as wartime construction takes time to impact ongoing operations.

Attrition and Replacement: By 1942 the U.S. was already three years into a shipbuilding program mandated by the 1938 Second Vinson Act. Both the U.S. and Japan accelerated the training of aircrew, but the U.S. had a more effective pilot rotation system, which meant that more veterans survived and went on to training or command billets.

Japanese Strategic Miscalculations

Underestimating Industrial Capacity: In retrospect, it is difficult to comprehend how Japan’s leadership managed to rationalize their way around the economic facts when they contemplated making war on the U.S. Indeed, internal Imperial Navy studies conducted in 1941 showed exactly the trends in naval shipbuilding outlined above.

Quality vs. Quantity Trade-offs: Japan’s wartime building program was lopsided. By concentrating on carriers she achieved what was once a formidable carrier force. At the same time, however, she failed to achieve a balanced fleet. Her carrier forces have never been backed by a large group of fast modern battleships, and her light screening forces have become fewer and fewer.

Part III: Strategic Analysis of Extended Naval Warfare – China vs. United States

The Geography of Pacific Naval Dominance

A prolonged naval war between China and the United States would unfold across multiple phases, each defined by control of key geographic zones that mirror the strategic depth that proved decisive in the U.S.-Japan conflict. China’s naval strategy explicitly recognizes three “island chains” that represent progressive lines of maritime control extending from the Chinese mainland deep into the Pacific.

The First Island Chain: The first island chain runs along East Asia’s coastline, from the Kuril Islands through Japan, Taiwan, and the Philippines down to Borneo, forming one of three island chain doctrines within the island chain strategy in the U.S. foreign policy. Chinese control of this chain would effectively transform the South and East China Seas into Chinese territorial waters, severing U.S. maritime access to key allies and disrupting critical trade routes.

The Second Island Chain: The second island chain is formed by Japan’s Bonin Islands and Volcano Islands, in addition to the Mariana Islands (most notably Guam), western Caroline Islands (Yap and Palau), and extends to Western New Guinea. Chinese dominance here would push U.S. forces back to Hawaii and severely compromise America’s ability to project power into the Western Pacific.

The Third Island Chain: The third island chain begins at the Aleutian Islands and runs south across the center of the Pacific Ocean towards Oceania, through the Hawaiian Islands, American Samoa, and Fiji, to reach New Zealand. Some Chinese strategists see Hawaii as Asia’s ‘third island chain,’ positioned only 2,400 miles from San Francisco, representing China’s ultimate strategic objective of controlling Pacific approaches to the American mainland.

Phase 1: Contest for the First Island Chain (Years 1-3)

In the opening phase of an extended conflict, China would leverage its massive shipbuilding advantage to establish control over the First Island Chain through attrition warfare. Unlike the Taiwan scenario examined in tactical wargames, a strategic war would involve sustained operations across multiple theaters simultaneously.

Chinese Offensive Operations: China has doubled its destroyer fleet from 20 in 2003 to 42 in 2023, operating 23 destroyers launched in the past 10 years compared with 11 operational U.S. destroyers. This force structure enables China to conduct simultaneous operations against Taiwan, pressure the Philippines, and contest Japanese control of the Ryukyu islands. The Chinese approach would emphasize overwhelming local superiority through concentrated forces while accepting losses that can be rapidly replaced.

Industrial War Mathematics: The historical precedent demonstrates that in extended conflicts, industrial capacity becomes more decisive than initial force ratios. According to projections, China’s PLAN could consist of a surface force of more than 450 ships, along with a submarine force approaching 110 submarines by 2030. With China’s 230-fold shipbuilding advantage, the PLA Navy could sustain losses that would cripple American naval power.

Strategic Outcomes: Based on industrial capacity ratios, China would likely achieve effective control of the South China Sea and significant portions of the East China Sea within the first 2-3 years of sustained conflict. U.S. forces would face the choice between accepting prohibitive losses attempting to maintain forward positions or conducting a fighting withdrawal to the Second Island Chain.

Phase 2: The Battle for the Second Island Chain (Years 3-5)

The second phase would center on China’s attempt to push U.S. forces beyond Guam while establishing permanent bases within the Second Island Chain. This phase would prove crucial, as American defeat here would effectively end U.S. ability to defend Hawaii or the continental United States from Pacific approaches.

Chinese Strategic Expansion: Beijing looks intent on building a network of dual-use facilities along the U.S. maritime periphery, with Chinese military facilities and technical collection sites that will allow Beijing to project power eastward into the Middle East and Indo-Pacific Theaters. The PLA Navy would leverage captured or neutralized bases in the Philippines and access agreements with Pacific Island nations to establish forward operating positions.

American Strategic Dilemma: The loss of Guam would represent a catastrophic blow to American Pacific strategy. U.S. General Douglas MacArthur pointed out that before World War II, the US protected its western shores with a line of defense from Hawaii, Guam, to the Philippines. Unlike World War II, however, American industrial capacity would be insufficient to replace losses while simultaneously maintaining global commitments in other theaters.

Industrial Attrition: By Years 3-5, the cumulative effect of China’s shipbuilding advantage would become overwhelming. While American technological superiority might maintain qualitative advantages, the quantitative disparity would reach levels that technology could not overcome. Chinese ability to replace losses at 230 times the American rate would enable sustained high-intensity operations while American forces faced critical shortages.

Phase 3: Chinese Pacific Dominance and Approach to North America (Years 5-8)

The final phase would witness Chinese naval forces achieving effective control of the Pacific west of Hawaii, with advanced forces threatening the U.S. West Coast directly. This scenario parallels Japanese strategic objectives in 1941-1942 but with China possessing the industrial capacity that Japan lacked.

Strategic Encirclement: China’s plans to build a military logistics base in Cuba are part of its secretive “Project 141” aimed at helping the PLA achieve global military presence. Combined with Pacific dominance, Chinese forces could threaten the United States from both Atlantic and Pacific approaches, forcing the dispersal of American naval power.

Economic Warfare: Control of the island chains gives the US the capacity to impose a military blockade against China, which is dependent on trade and imports carried by sea, including for 60 per cent of its oil. In Phase 3, these roles would reverse, with Chinese naval forces capable of interdicting American Pacific trade and threatening the economic lifelines that sustain American military operations.

Global Strategic Implications: According to US intelligence projections, by 2030, China is expected to possess a substantial battle force at sea, consisting of 425 ships, including 8 ballistic missile submarines, 13 nuclear-power attack submarines, and 65 aircraft carriers, cruisers and destroyers. This force structure would enable China to simultaneously maintain Pacific dominance while projecting power globally.

Anticipated Outcomes: Control of Maritime Domains

South China Sea: Chinese control would be absolute by Year 2, transforming the region into a Chinese lake. All Southeast Asian nations would face the choice between accommodation with Chinese demands or complete economic isolation.

East China Sea and Taiwan Strait: Chinese dominance would be established by Year 3, with Taiwan either under Chinese control or effectively blockaded. Japan would face severe constraints on its maritime activities and potential demands for base access.

Western Pacific to the Second Island Chain: By Year 4-5, Chinese forces would dominate approaches to Guam and northern Australia. The U.S. would be forced to operate from Hawaii and the continental United States, severely limiting power projection capabilities.

Central Pacific and Hawaiian Approaches: By Years 6-8, Chinese naval forces would achieve the capability to threaten Hawaii directly and conduct sustained operations near the U.S. West Coast. American Pacific Fleet operations would be constrained to defensive positions near the continental United States.

Strategic Assessment: The Industrial Verdict

The mathematical realities of shipbuilding capacity suggest that in any extended naval conflict, Chinese industrial advantages would prove decisive beyond the first 2-3 years. Unlike Japan in World War II, China possesses both the industrial capacity and the strategic depth to sustain prolonged high-intensity naval operations. The 230:1 shipbuilding advantage represents a strategic asymmetry that American technological superiority and allied support could not overcome in a war of attrition.

The geographic scope of such a conflict would extend far beyond the Taiwan Strait or South China Sea, ultimately threatening American maritime dominance across the entire Pacific Ocean. Without dramatic changes to shipbuilding capacity or revolutionary technological advantages, the United States would face the prospect of losing naval control over the Pacific for the first time since 1945.

Part IV: Strategic Assessment and Future Implications

The New Reality of Naval Competition

The comparison between current China-U.S. shipbuilding capacity and the historical U.S.-Japan example reveals both similarities and critical differences. Like Japan in 1941, the United States today faces an adversary with significantly greater industrial capacity for naval construction. However, unlike Japan’s situation, China’s industrial base is not dependent on distant resource supplies and is not vulnerable to blockade in the same way.

Scale of Disparity: The 230:1 shipbuilding capacity ratio between China and the United States is actually more extreme than the industrial disparity that favored America over Japan in World War II. The United States economic base was ten times larger than Japan’s during WWII, but the current shipbuilding gap suggests an even more dramatic asymmetry in this specific industrial sector.

Implications for Deterrence Strategy

Immediate Deterrence: Current wargaming suggests that the United States retains sufficient capability to defeat Chinese amphibious operations in the near term, particularly with allied support. However, this capability comes at enormous cost in terms of platforms and personnel that would be extremely difficult to replace given current industrial constraints.

Extended Deterrence: The long-term implications are more troubling. If China continues to expand its fleet at the current pace and the United States does not revitalize its shipbuilding industry, China will grow increasingly likely to emerge victorious from interstate war, especially a prolonged great power war.

Lessons from History Applied to Modern Context

Industrial Preparation: The World War II experience demonstrates that wartime mobilization of industrial capacity takes time to affect ongoing conflicts. The ships that held the line against an ascendant Imperial Japan in 1942 were purchased and built during the interwar years. This suggests that today’s shipbuilding investments will determine naval capabilities in conflicts that may occur in the 2030s and beyond.

Quality vs. Quantity Balance: Japan’s focus on technological superiority in individual platforms proved insufficient against American industrial capacity. Today’s U.S. Navy faces a similar challenge in balancing investments in highly capable but expensive platforms against the need for sufficient numbers to sustain operations in extended conflicts.

Alliance Integration: U.S. naval shipbuilding faces production and capacity constraints that undermine fleet readiness. Closer cooperation with allies like Japan and South Korea on ship construction and repair could help counter China’s maritime threat and bolster U.S. industrial resilience. However, it is unlikely that either Japan or South Korea will be eager to make themselves targets by devoting their shipbuilding facilities to the U.S. war efforts.

Conclusion

The comparison between Chinese and American shipbuilding capacity reveals a strategic challenge unprecedented since World War II. China’s 230-fold advantage in shipbuilding capacity, combined with its military-civil fusion strategy, provides Beijing with strategic advantages reminiscent of those the United States enjoyed over Japan during the Pacific War, and indicates that any war between the two 21st century powers will almost certainly be won by China as conclusively as the USA won the 20th-century war in the Pacific.

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