China’s rapid shipbuilding expansion, driven by foreign contracts, dual-use infrastructure, and industrial policies, is outpacing the struggling U.S. Navy. As American shipyards decline, China strengthens its position as the world’s leading maritime power.
A recent CSIS report highlights China’s dominance in shipbuilding, posing a serious challenge to U.S. naval superiority. The report explains how China integrates commercial and military production through industrial policies and military-civil fusion (MCF), allowing its navy to grow at an unprecedented rate.
At the center of this strategy is the China State Shipbuilding Corporation (CSSC), the world’s largest shipbuilder. CSSC merges civilian and military manufacturing, fueling the People’s Liberation Army Navy (PLAN) while benefiting from foreign investments. The report states that over 75% of ships built in CSSC-owned yards are exported, indirectly funding China’s naval expansion.
European and Asian firms, including Taiwan’s Evergreen Marine, have contributed billions to CSSC’s dual-use infrastructure. Western companies have also supplied China with essential technologies such as marine engines, gas turbines, and LNG carrier designs, helping it overcome industrial obstacles. Despite U.S. sanctions, Chinese shipbuilders still secure global financial backing.
China’s shipbuilding capacity vastly exceeds that of the U.S. A 2024 Congressional Research Service (CRS) report estimates that China’s shipbuilding capacity is 230 times greater. The 2024 U.S. Department of Defense (DOD) China Military Power report states that the PLAN operates 370 ships and submarines, including over 140 major combatants. In contrast, as of March 2025, the U.S. Naval Vessel Register (NVR) reported only 295 active ships.
The gap is expected to grow. Senator Dan Sullivan stated in a May 2024 Senate hearing that the PLAN would have 395 ships by 2025 and reach 435 by 2030. History shows that fleet size often determines victory. Sam Tangredi, writing in a 2023 Proceedings article, analyzed 28 historical naval battles and found that in 25 cases, the larger fleet won. He argues that sheer numbers provide scouting capability, flexibility, and striking power, as seen in the Napoleonic Wars and World War II.
The U.S. Navy’s decline stems from years of setbacks in shipbuilding. A 2024 report from the Asan Institute for Policy Studies, written by Peter Lee, highlights major delays in programs like the Ford-class aircraft carrier and Virginia-class submarines. A shrinking workforce and inconsistent government procurement have worsened the situation. The century-old Jones Act has also inflated domestic shipping costs, further weakening competitiveness. Unlike China, which heavily subsidizes its industry, the U.S. has resisted similar policies. Deregulation in the 1980s devastated American shipyards, increasing reliance on foreign-built vessels.
To counter China’s dominance, the U.S. has three options: revitalizing its shipbuilding industry, expanding unmanned platforms, or relying on allies like Japan and South Korea. Each option has strengths and weaknesses.
In February 2025, the Trump administration launched the “Make Shipbuilding Great Again” initiative to reverse the industry’s decline. The plan includes tax incentives, a Maritime Security Trust Fund, and maritime opportunity zones. It also seeks to reform procurement processes and address workforce shortages by raising shipyard wages. However, during a February 2025 Senate Armed Forces Committee hearing, Senator Roger Wicker warned that simply investing money won’t work without a strong industrial base.
A January 2025 U.S. Congressional Budget Office (CBO) report outlines major obstacles to the U.S. Navy’s 2025 shipbuilding plan. While the Navy aims to expand to 390 ships by 2054, outdated shipyards, labor shortages, and rising material costs could delay progress.
Unmanned Surface Vehicles (USVs) offer a cost-effective way to expand the fleet. These autonomous attack drones complement manned warships, making fleets harder to target while increasing resilience. However, they face serious drawbacks. Harsh maritime conditions accelerate wear, and external communication links make them vulnerable to jamming and hacking. Unlike crewed warships, USVs lack endurance, firepower, and versatility in extended combat.
With U.S. shipbuilding struggling, Washington is looking to allies for support. In March 2024, Voice of America (VOA) reported that Navy Secretary Carlos Del Toro visited shipyards in South Korea and Japan to explore partnerships. Working with allied shipbuilders or outsourcing maintenance could help address shortfalls. However, critics argue that outsourcing would further weaken U.S. industry.
Matthew Paxton, writing for Defense News in March 2024, warns that relying on foreign shipbuilders would sideline American workers and reduce U.S. sovereignty. He questions whether outsourcing is necessary when domestic shipyards have the capabilities to rebuild the fleet.
If the U.S. fails to act, China will continue expanding its navy without opposition. Without major reforms, the U.S. risks permanently losing naval dominance.
