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China State Shipbuilding Corp.

The new China State Shipbuilding Corporation is a state-owned conglomerate of 58 enterprises engaged in shipbuilding, ship-repair, shipboard equipment manufacturing, marine design and research. The workforce of 95,000 is located in East China, South China and Jiangxi Province. Major enterprises include Jiangnan Shipyard, Hudong Shipbuilding, Guangzhou Shipyard and China Shipbuilding Trading Company.

The China State Shipbuilding Corporation [CSSC] is a shipbuilding complex operating under the guidance of the State Council of China. It was originally formed in 1982, developed into a large enterprise group, rich in economic and technical resources and active in many fields of work, covering production, trade, research and development and education. CSSC, as the mainstay of the shipbuilding industry of China, produces a wide range of produces and has an all-round capability of designing, building and repairing. Main products include various categories of commercial ships up to 300,000 dwt, a great many types of naval ships, special purpose vessels, workboats and offshore units. Marine equipment, like marine diesel engines, diesel gensets, deck machinery, etc. are produced under licence or co-production agreements with international manufactures. In addition, a large variety of non-marine products, including installations, machinery and instrumentation, are made for more than 20 industries, like the energy, petrochemical, metallurgy, transportation, astronautics, building, medicine, environment protection and light industries.

CSSC, being technologically competent and fully capable for research, design and construction of naval ships, has developed and built for many years for the Chinese Navy nuclear submarines, conventional submarines, missile destroyers, missile frigates, missile fast attack crafts, hight-speed gunboats, anti-submarine patrol boats, minewarfare vessels, replenishment ships, training ships, electronic and weapon systems. It has also designed and built for the Chinese Army a variety of river-crossing facilities and other military equipment. Various types of naval vessels can also be designed and build according to the requirements of foreign navies and have been exported to many countries.

In early 1998 China State Shipbuilding Corporation (CSSC) began re-organising its massive shipbuilding resource in a move to capture a greater share of the global shipbuilding market. In the following 12 months, its main shipyards were to be amalgamated into production groups, each able to operate independently to take advantage of China's fast growing market-driven economy. The re-organisation of CSSC was part of a wider plan by China's Central Government, unveiled at the Ninth National People's Congress (NPC) at Beijing in March 1998, to streamline the operation of its ministries and state-owned enterprises. By cutting red tape, improving government efficiency and maximising resources, the re-organisation of government-owned enterprises aims to meet the demands of China's maturing market economy and the trend towards economic globalisation. Initially it appeared that the re-structuring of CSSC would consist of a structure under which CSSC shipyards would be consolidated into larger production groups in Guangzhou, Shanghai and Dalian.

Under the overall State Council initiative of 01 July 1999, the Chinese government split the top five Defense and Technology Corporations into ten new enterprises. These corporations are all large State Owned Enterprises (SOE's) under direct supervision of the State Council. These SOE's include the China State Shipbuilding Corporation (CSSC) and the China Shipbuilding Industry Corporation (CSIC).

In 1998, at least 30 shipyards in China were building steel structure sea-going vessels for export purpose (9 from CSSC, 4 from CSIC and 17 from others). The shipbuilding capacity for steel structure sea-going ships was around 4,500,000 DWTs (CSSC, CSIC and the others roughly share one-third each). Critical to the development of the industry was the decentralization of control of the shipyards. For example, the three major shipyards in Jiangsu Province with total shipbuilding capacity of 690,000 tons and an actual output of 368,000 DWTs in 1999 have been ceded to provincial control.

After the spinoff of CSIC, CSSC had a workforce of 95,000 people and incorporated 58 enterprises and institutions,which can be classified and enumerated as follows: key shipyards, dockyards and shipboard equipment manufacturing plants in East China, South China and the Jiangxi Province, namely, the Jiangnan Shipyard(Group) Co.,Ltd., Hudong Shipbuilding Group, and Guangzhou Shipyard International Co.,Ltd.; Key research and design centers, including Marine Design & Research Institute of China, China Ninth Design & Research Institute of the Shipbuilding Industry and CSSC System Engineering Research Institute; and a number of proprietary holding companies, like China Shipbuilding Trading Co.,Ltd., and other companies.

Following the 1999 organizational reforms, the integration of the military and commercial sides of Chinese shipbuilding was quite explicit. The shipyards that once built only warships turned their expertise and facilities to the construction of freighters and other vessels for commercial purposes. While CSSC continued to build and modernize ships in response to requirements from the Equipment & Technology Department of the PLA Navy, CSSC has also exported ships to more than 40 countries and regions including Japan, the United States, Germany, Norway, France, Switzerland, Iran, Canada, Hong Kong, Singapore and Malaysia.

Achieving acceptable quality from the low-tech low-wage Chinese shipbuilding industry remains a challenge, and international customers find that a good quality-control inspector is a prerequisite for building in China. Productivity remains short of Japanese and South Korean yards, but the gap is being addressed by management system changes, higher quality standards and links with leading Japanese and Korean companies.

As of early 1998 CSSC was considering the formation of three large shipbuilding groups which would be based in Dalian, Shanghai and Guangzhou. These would be in addition to the previously announced plan to create the country's largest shipbuilding group through the merger of Dalian New Shipyard, Dalian Shipyard and Bohai Shipyard into the Liaoning Shipbuilding Group. Guangzhou Shipyard International Co Ltd, listed on the Hongkong stock exchange, and Jiangnan Heavy Industrial Co Ltd in Shanghai are candidates for restructuring.

CSTC is the trade arm of China State Shipbuilding Corporation, specially engaged in export and import businesses of CSSC. Its line of business covers commercial & naval ship export, marine and non-marine equipment export, import of shipbuilding materials and equipment; technology import and export, compensation trade, coproduction, material processing and assembly, labor and technical service, construction projects including shipyard, equipment manufacturing plants, steel structures, industrial installation packages, high rise buildings, co-production and joint venture. Branch companies are distributed in Shanghai, Dalian, Tianjin, Guangzhou, Xi'an, Kunming, Wuhan, Jiujiang and Chongqing, and its trade and representative offices are set up in Hong Kong, Hamburg, Los Angeles, Bangkok, Islamabad, Moscow, London and Athens.

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