The International Competitive Relationships of Three Leading Countries in the Global Shipbuilding Industry

Abstract

South Korea, China, and Japan are three dominant countries in the global shipbuilding industry, and the competition between them has become more complex over time. The International Maritime Organization environmental regulations and the wave of Industry 4.0 have made the global shipbuilding industry more technology intensive than before. However, after the financial crisis of 2008, Chinas labor-intensive strategy outperformed the technology-intensive competitive strategy adopted by Japan and South Korea, and China was ranked first with the largest market share. This study sets out to explore whether Chinas labor-intensive strategy will remain superior to the technology-intensive one of Japan and South Korea. Specifically, we investigate how competitive relationships between the three countries changed after the 2008 global financial crisis. We also forecast how many ships each country will complete in through 2026. To analyze this dynamic competitive system, we use the three-dimensional Lotka-Volterra model, drawing on annual data reporting the number of ships built. The findings suggest that China has gained a competitive advantage over Japan since the 2008 global financial crisis, while South Korea has maintained a mutualistic relationship with both Japan and China. Our forecast suggests that China may lose its competitive advantage in the near future, if China does not embrace a more technology-intensive approach.