China is not happy wit the latest petition from five U.S. labor unions requesting the Biden Administration to review China’s subsidies for its shipbuilders calling the move ill-founded and hazardous.
Under section 301 case, the unions urged the Office of the U.S. Trade Representative to take measures, including the imposition of port fees on Chinese-built ships that dock at U.S. ports, despite China saying there was no such precedent, and the creation of a fund with contributions from the aforementioned fees to help the domestic industry and its workers compete.
Chinese legal and industrial experts say they view the petition as a choreographed move aimed at seeking “remedies” for an industry on the decline, in total disregard of the real causes of the decline, including the evolving global comparative advantages and the lack of skilled U.S. workers.
Employment of marine engineers and naval architects is projected to show “little or no change” from 2022 to 2032 in the United States, according to the U.S. Bureau of Labor Statistics. However, such jobs are expanding in countries including the Republic of Korea and China.
Sun Lei, senior partner with Dentons, said that the current global share of the U.S. shipbuilding industry has declined drastically, but no causal link can be established between the decline and China’s industrial policies or subsidies.
After looking into this petition, Sun said that the goal of the U.S. domestic industry may not be to impose tariffs or other taxation measures on China’s shipping services or ships, but to urge the U.S. government to increase policy and subsidy support for its domestic shipping and shipbuilding industries.
“I understand there is a need on the U.S. side to adjust its supply chain, but I think the Americans know clearly that it’s unrealistic to bring the whole supply chain back,” he said. “The problems concerning supply chains need to be solved with all relevant countries, such as the Republic of Korea (another shipbuilding giant).”
China’s Ministry of Commerce (MOC) on Thursday voiced resolute opposition to the move, saying this unilateral trade protectionism in the shipbuilding sector ignores World Trade Organization (WTO) rules.
Noting that the U.S. side blames China for its own industrial development problems in the absence of any factual basis, the MOC said that the accusations against China are “totally untenable.”
MOC Spokesperson He Yadong told reporters that China pays close attention to this matter and will take all necessary measures to firmly defend its legitimate rights and interests.
Loud objections were also voiced on social media platforms, with some comments on China’s Weibo describing the unions’ demand of a port fee on Chinese-built ships that dock at U.S. ports as like robbery.
One comment on X stated, “The United States don’t get to be No. 1 forever & always & it’s not necessarily bad for you to not be.” Some have indicated politics at play in an election year in the United States, while others expressed deep worries over the move’s potentially hazardous impact on global trade.
Liu Cungen, professor with Shanghai Jiaotong University, attributed the rapid growth of China’s shipbuilding industry to the country’s technological progress and complete industrial chain.
Cui Fan, professor with the School of International Trade and Economics at the Beijing-based University of International Business and Economics, said that the growth of China’s shipbuilding sector was the natural result of China’s comparative advantages formed along with the development of global industries over the past decades.
“The production cycle of the shipbuilding industry is long, and it takes a long time for ship businesses to recover costs. In this case, all shipbuilding countries have used export credit measures to a certain extent, which are also allowed by the WTO,” Cui was quoted as saying by Yicai, a Shanghai-based business and financial media outlet.
