Diamond Theory-based Yangzhou Shipbuilding Industry Development

China's shipbuilding industry is a strategic industry with international competitiveness and our ship production has been at the forefront of the world. In the new international competitive situation in the 21st century, in order to achieve the strategic goal of ranking among the countries with strong shipbuilding industry in the world, China must think about and explore the development of this industry in the new ideas, make forward-looking and rational industrial policy, achieve innovation and optimization of industrial organization and walk a way to modernized shipbuilding industry road with Chinese characteristics.Shipbuilding industry in Yangzhou has experienced rapid development for several years, and is making an increasing contribution to economic growth. Now it has become one of some leading industries of the city. But since the economic crisis swept the globe in 2008, the whole world's real economy has been seriously affected. In such macro-economic environment with recession, shipbuilding industry in Yangzhou is also facing the same challenges. Therefore, learning lessons, analyzing current situation and future development prospects, and explore ideas and measures responding to competition and challenges is very important for developing shipbuilding industry of Yangzhou, expanding market share, enhancing economic efficiency and promoting the industrial and the whole national economy development.This paper adds an external environmental factor on the basis of six core elements of Porter's "diamond model", and then uses an improved diamond model as theoretical analysis framework, and industrial competitiveness theory, comparative advantage theory and the new geography-economics theory to study several major factors which impact and decide the development of shipbuilding industry of Yangzhou. Furthermore, the paper analyzes strengths and weaknesses of various aspects of Yangzhou shipbuilding industry development in-depth, and makes a judgment about its current situation and the position. At last the paper puts up some specific recommendations to promote its development.The paper comes to the conclusion through research: the capacity of shipbuilding industry has been exceeded at the point of external environment which leads to an inevitable decline of industry. The economic crisis intensifies such contradiction of supply and demand and makes industry decline come earlier. However, the general direction of shipbuilding industry transferring to China is all the same, and in the future the world's shipbuilding industry will show a overall tendency that the total declines gradually, but the of China's share of shipbuilding industry structure will rise gradually. In this trend, Yangzhou shipbuilding industry not only has certain advantages in the element conditions, demand structure of product and government support, but also has significant potential in two major areas of developing the related ship product and so the promoting ship production in river vessels. However, it can't be ignored that there are still many problems in the use of natural resources, the size enterprises and the role of industry associations as well.According to the above conclusions, the paper puts forward some specific proposals: firstly, to improve the factor conditions through the introducing the talent and knowledge, improving the level of science and information technology, allocating natural resources rationally and establishing a market of the ship transaction; Secondly, according to the market demand, to increase investment of science and technology, to improve the proportion of high value-added ship taking the market of inland navigation into accounting, and to improve the whole structure of yangzhou shipbuilding industry; thirdly, to support related ship matching industry and to pay more attention to ship repair and ship-breaking industry; fourthly, to clear corporation strategy and to optimize business structure; and fifthly, to define the functions of government and trade associations, to resolutely implement the policies of national shipbuilding industry revitalization planning, to establish the platforms of communication and collaboration to play a supporting and guiding role.