Editorial of Ship&Offshore 2/2022: Fair game at eye level

Just as we are closing this issue of Ship&Offshore, the Olympic Winter Games in Beijing have ended. An event that, in addition to the performance of outstanding athletes, once again saw one thing quite clearly: China’s will to demonstrate its power to the world.

Of course, no one would deny that the autocratic state is in fact a superpower. In any case, when it comes to economic growth.

By 2030, China is forecast to become the world’s largest economy. Recently released figures reveal that it has just surpassed the whole of the European Union in terms of gross domestic product.

The prevailing gigantism is illustrated, among other things, by the plans for the Belt and Road Initiative that aims to connect China with 60 other countries. The infrastructure project is considered the largest investment since the Marshall Plan.

The European economy is inextricably linked with China, and we cannot avoid the fact that we need reasonable alliances with the nation now and in the future.

However, Europe’s relations with the country in the Far East have always been a double-edged sword. Cheap, mass-produced goods are welcome; the political power structure is hardly compatible with our values. In business, protectionism and state subsidies lead to a distortion of competition that cannot be offset or compensated for in our part of the world.

For the European shipbuilding industry, this may result in an entire industry outflowing in the not-too-distant future. Certain segments, such as the construction of large container vessels, tankers and bulk carriers, are probably already lost for good.

And this is not where China‘s ambitions end. Two of the features in this issue – one on the cruise industry and one on offshore wind – clearly indicate that China is also catching up in subsectors of the maritime and offshore economies in which European countries have so far enjoyed a certain supremacy. Notably, Europe’s dominance and expertise in cruise ship construction is endangered, with the first locally built Chinese cruise vessel due to be delivered soon.

Demands of the local shipbuilding associations to create a sustainable remedy are as simple as they are clear. The EU must ensure appropriate framework conditions for the European shipbuilding industry so that shipbuilders here are able to compete with Asian companies.

So would it make sense for the European shipbuilders to pool their skills and position themselves accordingly to bring back the big orders or at least ensure that no more are lost?

What are the options?

At his recent visit to insolvent MV Werften, Germany’s newly elected Minister for Economy and Climate Protection, Robert Habeck, tried to spread optimism. He noted the potential of modernising the current fleet towards carbon-neutral operation, and the need for offshore converter platforms; there would be still many options for Germany (and Europe) available, he said. He didn’t, however, use the term “state subsidies” in this context.

But is it really satisfying to (continue to) be active in niche markets and leave the big slice of the cake to others?

We will probably not find a mutually satisfactory solution any time soon. We are aware of our technological leadership in Europe with all the forward-looking developments, but a way must also be found to avoid losing out in the long run to competition from the Far East. And since, of course, it cannot be assumed that China will be measured against European guidelines in the future, the impetus can only ever come from here. Politically, of course.