Updated Nov.2,2006 09:23 KST

China in Assault on Korea¡¯s Shipbuilding Supremacy
China is trying to challenge Korea¡¯s lead in shipbuilding, where Korean firms hold a 40 percent global market share, by means fair or foul. Chinese companies are expanding production facilities with the aim of becoming the world¡¯s largest shipbuilder by 2010. The attempt apparently involves scouting and poaching ship designers and skilled workers from Korean rivals, and the National Intelligence Service recently launched investigations into technology leaks to China from the Korean shipbuilding hubs of Ulsan, Changwon, Jinhae, Geoje and Busan.


¡ß Money Talks

One leading Busan-based company once designed oil tankers and bulk carriers for large domestic shipbuilders, but these days it designs only for Chinese companies, who pay better. Of course this is not illegal, but it deals a blow to Korean shipbuilders since advanced Korean technology allows Chinese companies to deliver finished ships ahead of schedule and to acquire design know-how to boost their competitiveness. One skilled Korean worker with a leading Korean shipbuilder says he and several colleagues are looking to move to China since Chinese companies reportedly treat skilled Korean workers very well.

¡ß Stealth

One way Chinese firms try to get their hands on Korean designs and technology is to place orders with Korean shipbuilders. That involves legitimately dispatching staff to supervise the two-year-odd process here, and plenty of opportunity to demand a close look at the blueprints. A staffer with Hyundai Heavy Industries, one of Korea¡¯s three major shipbuilders, says the company is often involved in a war of nerves with Chinese customers who try to acquire detailed designs.

¡ß Design and Skilled Work

Highly developed design technology, skilled workers and outstanding management of facilities are key factors behind Korea¡¯s dominance in the global shipbuilding industry, especially in the high value-added field. Hyundai Heavy Industries has an army of 1,300 designers and 3,000 researchers and developers. Samsung Heavy Industries and Daewoo Heavy Industries and Machinery also have some 1,500 designers each. With the large design workforce, Korean shipbuilders can meet and flexibly cope with demands from customers for their US$200 million-300 million ships. They soared ahead of Japanese shipbuilders who made the mistake of laying off huge numbers of designers in restructuring in the 1990s.

China is now the world¡¯s third largest shipbuilder by a long chalk, and while facilities can be expanded relatively quickly, it takes time to acquire design capability and foster a skilled workforce. The vice chairman of the Korea Shipbuilders Association, Han Jang-sop, said China is some 10 years behind Korea in terms of design capability, but the gap will narrow fast if the exodus of technology and skilled workers continues.

(englishnews@chosun.com )