Comparative Study On The International Competitiveness Of Shipbuilding Industry In China, Japan And Korea

With the boom of its economy, China has become an integral part of international communities. As a result, more and more Chinese shipbuilding enterprises began business operations across borders and unveiled their journey of internationalization. Since China's entry into the WTO in 2001, China's economy has been integrated into global trend to an even greater extent and become an indispensable part.In 2009, China's GDP reached 335,353 trillion Yuan (per capita GDP 25,796 Yuan), ranking the third in the world. In 2009,43 Chinese companies were listed on the world top 500 companies ranked by the Fortune magazine, surpassing England for the first time. A group of Chinese companies like Lenovo, Haier, Huawei, ZTE, TCL, and Hisense, have acquired more proprietary technology and become more competitive in the global market, greatly enhancing the brand value of "made in China and made by China".Facing the new round of financial crisis derived from American credit crunch, many foreign scholars thought this financial crisis reorganized the world, and accelerated the coming of China times. The world financial hardship poses great opportunities for china to revive and also huge potential for Chinese shipbuilding companies to operate globally, catching up with and surpassing other global competitors.Currently, the world shipbuilding industry has been characteristic of a new four-pole structure of Korea, Japan, China and Europe and other parts. As the world's third largest shipbuilding country, China's shipbuilding industry competing intensively with Japan, Korea and other advanced shipbuilding countries. Ships are the focus of this paper because of its vital role in the development of China's economy and its large contribution to China's foreign trade. Shipbuilding industry is one of the most revolutionary and influential applications employed by modern technology. The truly elemental human need for shipment and trade has often driven the development and revolution of technology and machine.The way ahead for Chinese companies going global and establishing subsidiaries all over the world is not smooth sailing, but full of unchartered blocks and barriers. Compared with other world top 500 companies, Chinese companies are still lagged behind in areas of management, especially in cultivating corporate culture, company core competitiveness, and in fulfilling corporate social responsibilities. What shall Chinese shipbuilding companies do to get the upper hand in worldwide competition and to be better integrated into the company internationalization process?The essence of shipbuilding enterprise internationalization is to build core competitiveness while walking across borders. Owning core high-technology is the best way to unite all stakeholders and exert synergy effect via all vehicles. Good command of establishing this kind of technology is crucial for Chinese shipbuilding enterprises to participate and get an upper hand in global competition.Although many scholars at home and abroad did research on the competency of shipbuilding industry and some of them explained and described the situation of international competitiveness of China's ship enterprises from different perspectives, they do not give a systematic explanation of the existing problems nor do they have adequate theoretical support.The basic idea and research structure of this paper is as follows:It first introduces the research background and significance, and explained the importance of shipbuilding industry, which is a comprehensive industry providing technical equipment for the shipping industry, ocean development and national defense. The ship industry serves as a driving force for the development of the steel industry, the chemical industry, the light industry, the textile industry, the equipment manufacturing industry, the electronic information industry and other critical industries. It is also vital to enlarging the export volume. This paper starts from the main features of the international shipbuilding industry, and discusses in detail the market competition and competitive landscape in China, Japan and Korea. Through comparative analysis of the situations in China, Japan and South Korea with Diamond Theory and Theory of Competitive Parity, it explores the disadvantages of Chinese shipbuilding industry.This paper contains six chapters, with chapter one introducing background of the study, status quo of relevant research, methods and structure of this paper.In chapter two, the focus lies in the relevant theories:Diamond Theory and Theory of Competitive Parity.Chapter three centers on the main features, development situations and competitive landscapes of shipbuilding industry in China, Japan and Korea. This chapter analyzes the characteristics of the shipbuilding industry, pointing out that shipbuilding industry is an important strategic industry and a typical export industry facing global competition during the integration of international market. It states that the traditional labor-intensive nature of shipbuilding industry is gradually weakening. It introduces the development of China's shipbuilding industry as well as Japan and Korea's shipbuilding industry, and analyzes the competition in world market The main features of shipbuilding industry include technological innovation, main force of the competition in world market, rapid increase in world shipbuilding capacity, and more fierce market competition. The competitive landscape of world shipbuilding industry and competitive trends are also talked about in this chapter.Chapter four uses Michael Porter's Diamond Theory model and Competitive Parity to analyze the competitiveness of shipbuilding enterprises in China, Japan and Korea. Based on the Comparative Advantage and Factor Endowment theory, Michael Porter raised the diamond model explaining that the comparative advantage and edge of the industry is lying in the four basic elements and two supporting factors:factor conditions, demand conditions, related and supporting industries, firm strategy, structure and rivalry, government and chance. This paper analyzes the competitiveness of China, Japan and Korea's shipbuilding industry from these six elements. This chapter also compares the shipbuilding industry in China, Japan and Korea from the perspective of competitive parity. The theory is categorized into two levels:the first is a comprehensive reflection of international competitiveness and direct indication of the level of competitiveness, including industrial market power and profits capacity. The second level of factors includes size, environment, technology capabilities and products. Through analysis, the disadvantage faced by the shipbuilding industry in China are found. There remain a number of outstanding problems and contradictions in the comprehensive competitiveness, industrial structure, technological level, marine equipment industry and corporate management and policy.Thanks to the groundwork of the previous chapters, the fifth chapter optimizes the strategy and measures for the Chinese shipbuilding industry from factor conditions, demand conditions, related and supporting industries, firm strategy, structure and rivalry, government and chance. It suggests that the shipbuilding industry should aim to enhance the comparative advantages, increase technological innovation, improve the level of shipbuilding technology, and take various measures to strengthen advantage of labor factors as well. From the demand, Chinese enterprises should explore the domestic and potential needs. In addition, attention should be paid to developing supporting industries. Because these key supporting enterprises do not have the international competitiveness, Chinese government should set up factories with foreign joint ventures or allow the foreigners to own some stocks to directly introduce foreign advanced technology and equipments. With these measures, Chinese shipbuilding industry can pursue development based on the absorption of the advanced technology and launch their own branded products. Meanwhile, through the restructuring, all enterprises ought to promote organizational innovation and standardize their management systems. Finally, the government should play a leading role in optimizing China's shipbuilding industry environment.The conclusion of this paper is that it is a complicated project to improve the international competitiveness of Chinese shipbuilding enterprises. It needs co-ordination of various aspects and cannot be achieved in a short time. With the integration of the global economy and the increase of market competition, improving the international competitiveness becomes an important prerequisite for development in the international market, and has direct effect on businesses'survival. In order to gain and maintain the competitive advantage, enterprises in China ought to accelerate the pace of technological innovation. They should strengthen internal management by formulating a scientific and effective system, strengthening daily management, improving internal efficiency continuously, and enhancing personnel professional skills, etc. There is no doubt that the most successful shipbuilding enterprises in the future will be those who truly understand characteristics of markets in different regions in the world and can adjust themselves accurately and timely.