China Surpasses U.S. in Naval Shipbuilding, Reshaping Global Maritime Power

China Surpasses U.S. in Naval Shipbuilding, Reshaping Global Maritime Power

China’s rapid shipbuilding expansion has created the world’s largest navy, challenging U.S. dominance and altering the balance of power at sea.

In the past two decades, China has transformed its shipbuilding industry and naval forces at an unprecedented pace, now accounting for more than 60% of global ship orders and operating the world’s largest navy by number of warships. This surge in maritime capability is not only fueling China’s economic growth but also shifting the global balance of power, raising concerns in Washington and among U.S. allies across the Indo-Pacific and beyond.

China’s naval expansion is driven by a combination of state-directed industrial policy, massive investment in shipyards, and a strategic vision to assert its interests in contested waters such as the South China Sea, while projecting influence far beyond its shores. As the United States and its partners scramble to respond, the world is witnessing a new era of maritime competition with far-reaching implications for security, trade, and geopolitics.

How Did China Build the World’s Largest Navy?

China’s rise as a maritime power is rooted in a deliberate, long-term strategy to modernize its navy and dominate global shipbuilding. In the 1990s, China’s navy was largely outdated, but by 2021, the People’s Liberation Army Navy (PLAN) had surpassed the U.S. Navy in the number of battle force ships. Estimates now put the PLAN’s fleet at over 370 ships, with projections of reaching 435 by 2030, compared to the U.S. Navy’s roughly 290 ships and a goal of 381 in the coming decades.

This transformation is powered by China’s vast shipbuilding industry. The country boasts around 175 major shipyards, many of which are dual-use facilities capable of producing both commercial and military vessels. Since 2018, China has led the world in commercial shipbuilding, and its shipyards are estimated to be 200 times more productive than those in the United States. In 2024 alone, China’s four largest shipyards produced 39 warships with a combined displacement of 550,000 tonnes—more than the entire Royal Navy of the United Kingdom.

China’s shipbuilding edge is further enhanced by the 2019 merger of its two largest state-owned shipbuilding companies into the China Shipbuilding Group Corporation, streamlining production and technology transfer. This integration allows for rapid scaling of naval construction, with about 70% of Chinese warships launched after 2010.

While the U.S. Navy still leads in overall tonnage and operates more large aircraft carriers and nuclear submarines, China is closing the gap in advanced surface combatants and missile capabilities. The PLAN has doubled its destroyer fleet in the past two decades and is on track to surpass the U.S. in the number of vertical launch missile cells by 2027, enabling it to deploy more advanced missiles at sea.

Military-Civilian Fusion: China’s Unique Advantage

A key factor in China’s shipbuilding success is its policy of “military-civilian fusion.” This approach integrates commercial and military shipbuilding, allowing shipyards to switch production lines quickly and efficiently. Dual-use shipyards can produce commercial cargo ships, then rapidly shift to building warships or auxiliary vessels as needed. This flexibility is unmatched globally and could be decisive in a prolonged conflict, enabling China to replace losses and sustain naval operations far more quickly than its rivals.

Foreign companies often place commercial orders at these dual-use shipyards, indirectly supporting China’s naval modernization through technology transfer and economies of scale. The result is a shipbuilding ecosystem that not only supports China’s commercial ambitions but also underpins its growing military power.

Why Is China Expanding Its Navy?

China’s naval buildup is motivated by a combination of economic, strategic, and historical factors. As the world’s largest trading nation, China relies on secure sea lanes for 95% of its international trade. Seven of the world’s ten busiest ports are located in China, making maritime security a top priority for Beijing.

Strategically, China seeks to assert its territorial claims in the South and East China Seas, deter U.S. intervention in regional disputes, and protect its commercial interests along critical sea routes, including those linking China to the Persian Gulf and Africa. The PLAN’s modernization is also aimed at supporting potential military operations against Taiwan, which Beijing considers a breakaway province.

President Xi Jinping has repeatedly emphasized the importance of a strong navy to prevent a repeat of past humiliations, such as foreign invasions and colonial-era concessions. The rapid expansion of China’s naval arsenal is seen as a resurgence of national pride and a means to secure China’s status as a leading world power.

Global Reach: Ports, Bases, and Overseas Influence

China’s maritime ambitions now extend far beyond its immediate region. Through the Belt and Road Initiative and the Maritime Silk Road, China has invested heavily in overseas ports and infrastructure, creating a network of strategic footholds across Asia, Africa, and even Europe. As of 2023, China had signed seventy bilateral and regional shipping agreements with sixty-six countries, establishing shipping routes and service networks that span the globe.

China’s most significant overseas military installation is at Djibouti’s Doraleh port, established in 2017 to support anti-piracy missions and provide logistical support for Chinese naval vessels. The Ream Naval Base in Cambodia, though officially described as a commercial facility, has hosted Chinese warships and is seen as a key outpost for power projection in Southeast Asia. U.S. intelligence agencies have identified several other locations where China may seek to establish military facilities, including Pakistan, Sri Lanka, Equatorial Guinea, and the United Arab Emirates.

Unlike the United States, which maintains over 128 overseas military bases, China’s approach relies on commercial port investments with dual-use potential. This strategy allows Beijing to maintain strategic flexibility and avoid the political complications of formal military base agreements, while still enabling rapid deployment of naval assets if needed.

How Is the U.S. Responding?

The scale and speed of China’s naval expansion have triggered alarm in Washington and among U.S. allies. The U.S. Navy’s own shipbuilding capacity has declined sharply, with just seven major shipyards compared to China’s 175. The U.S. now controls less than 0.1% of global shipbuilding capacity, a dramatic fall from its post-World War II dominance.

Recent years have seen a flurry of policy initiatives aimed at reversing this trend. The Trump administration issued an executive order to restore American maritime dominance, directing federal agencies to create a Maritime Action Plan and proposing new fees on Chinese-manufactured ships entering U.S. ports. Congress has passed legislation allocating tens of billions of dollars to revitalize the U.S. shipbuilding and repair industrial base, invest in workforce training, and modernize shipyards.

Efforts are also underway to deepen partnerships with allies such as Japan, South Korea, India, and the Philippines. The U.S. is expanding its network of maintenance and repair facilities across the Indo-Pacific, with American warships now undergoing overhauls in Japanese and South Korean commercial yards. These regional collaborations are seen as essential to maintaining a credible forward presence in the face of China’s growing naval reach.

Despite these efforts, the U.S. Navy continues to face significant challenges. Production shortfalls, labor shortages, and facility limitations have led to costly delays and degraded operational readiness. The construction of advanced warships, such as the Arleigh Burke-class destroyer, takes years longer in the U.S. than in China. The U.S. shipbuilding workforce has shrunk from 120,000 to about 72,000 over the past two decades, further hampering expansion plans.

Alliances and Strategic Posture in the Indo-Pacific

To counter China’s maritime ambitions, the U.S. has strengthened alliances and security partnerships in the Indo-Pacific. Japan, a key U.S. ally, has designated 14 airports and 26 seaports for military use in the event of a contingency, reinforcing the so-called First Island Chain—a defensive line stretching from Japan through Taiwan and the Philippines. The AUKUS pact and the QUAD initiative, involving Australia, Japan, and India, aim to enhance maritime security cooperation and deter Chinese aggression.

Japan has also bolstered its missile defenses and expanded its Self-Defense Forces’ access to civilian infrastructure, reflecting growing concern over China’s ballistic missile arsenal and naval activities near the Ryukyu Islands and Taiwan. These measures are designed to project deterrence and restrict China’s military activity in the Western Pacific.

What Are the Risks and Global Impacts?

China’s shipbuilding dominance and naval expansion carry significant risks for global security and economic stability. The rapid growth of the PLAN enhances China’s ability to enforce maritime claims, conduct power projection, and challenge U.S. naval dominance in critical waterways such as the South China Sea and the Taiwan Strait. Recent incidents, such as the August 2025 collision between a PLAN destroyer and a China Coast Guard vessel near Scarborough Shoal, highlight both the assertiveness and the coordination challenges of China’s maritime forces.

China’s expanding network of overseas ports and bases, many with dual-use potential, allows for greater flexibility in deploying naval assets and supporting long-range operations. However, this approach also creates vulnerabilities for host nations, many of which are heavily indebted to China and face economic instability. The use of commercial investments to secure strategic leverage has raised concerns about debt sustainability and the potential for diplomatic shifts in countries hosting Chinese-funded ports.

For the United States and its allies, the decline of domestic shipbuilding capacity threatens military readiness and the ability to secure vital sea lanes. The U.S. merchant fleet has dwindled to fewer than 180 international trading ships, limiting sealift capacity in a contested environment. The loss of shipbuilding expertise and industrial base is seen as a national security risk, prompting calls for a modern-day Marshall Plan to rebuild American maritime power.

Technological and Operational Gaps

While China’s navy is now the largest by number of ships, it still lags behind the U.S. in certain areas. The U.S. maintains a clear edge in nuclear-powered submarines, with 66 compared to China’s 12, and operates more large aircraft carriers. Chinese naval technology, particularly in submarines and carrier aviation, is considered less advanced, though the gap is narrowing as China invests in new platforms such as the Type 003 aircraft carrier and unmanned underwater drones.

China’s ability to rapidly repair and replace ships gives it a strategic advantage in a prolonged conflict, but effective use of these assets depends on personnel quality, training, and coordination. The August 2025 collision in the South China Sea exposed command and control problems between the PLAN and the China Coast Guard, underscoring the challenges of integrating diverse maritime forces.

Regional and Global Reactions

China’s naval expansion has triggered a range of responses across the Indo-Pacific and beyond. Regional countries such as Japan, Australia, and India have increased defense spending, enhanced maritime patrols, and deepened security cooperation with the United States. Southeast Asian nations, wary of China’s assertiveness in the South China Sea, are seeking to balance economic ties with Beijing against security concerns.

The U.S. and its allies are also working to expand non-Chinese shipbuilding capacity, with recommendations to invest in allied shipyards, impose docking fees on Chinese-made vessels, and cut financial ties with Chinese state-owned shipbuilders. Labor unions and industry groups in the U.S. have called for stronger support for domestic shipbuilding and tougher penalties against Chinese dominance.

China, for its part, insists that its naval expansion is defensive in nature and aimed at protecting its maritime interests. Chinese officials have stated that the country has no interest in military interference abroad, except for Taiwan, which remains a flashpoint for potential conflict. However, the growing presence of Chinese warships in international waters, including around Australia and near Japan, has heightened regional anxieties and prompted calls for greater transparency and confidence-building measures.

What’s Next for Global Maritime Power?

The ongoing naval arms race between China and the United States is reshaping the global maritime order. China’s state-backed shipbuilding sector, coupled with strategic investments and production efficiencies, has enabled the PLAN to expand at a scale unmatched by the U.S. Meanwhile, the United States faces structural and operational challenges that limit its ability to compete in naval production and sustain its forward presence in key regions.

Experts warn that if the U.S. fails to act boldly and invest in its maritime industrial base, it risks ceding control of the seas and the geopolitical influence that flows from maritime power. The oceans have long been the backbone of American global power, and the current shift in naval balance could have profound consequences for international security, trade, and the rules-based order.

As China continues to expand its navy and global port network, the world will be watching closely to see how the United States and its allies respond. The outcome of this competition will shape the future of maritime power for decades to come.

Key Points

• China now operates the world’s largest navy by number of ships, with over 370 warships and plans to reach 435 by 2030.
• China’s shipbuilding industry accounts for more than 60% of global orders and is estimated to be 200 times more productive than the U.S. shipbuilding sector.
• The U.S. Navy still leads in overall tonnage, aircraft carriers, and nuclear submarines, but China is rapidly closing the gap in advanced surface combatants and missile capabilities.
• China’s military-civilian fusion policy allows for rapid scaling of naval construction and dual-use of commercial shipyards.
• China’s global network of strategic ports and selective military bases extends its reach far beyond Asia, challenging U.S. maritime dominance.
• The U.S. is investing billions to revitalize its shipbuilding industry and deepen alliances in the Indo-Pacific, but faces significant challenges in workforce, capacity, and procurement.
• Regional countries are responding by enhancing defense cooperation, expanding military infrastructure, and seeking to balance economic ties with security concerns.
• The ongoing naval competition between China and the U.S. is reshaping global power dynamics and will influence international security and trade for years to come.