Restructuring in Korean and Chinese shipbuilding criticized

South Korean and Chinese efforts to restructure their respective shipbuilding sectors are backward looking and inadequate , according to Shipbuilders' Association of Japan executive director Nobutaka Nambu. Nambu said that he would be looking to the government to insist on a fair competition environment in the face of government intervention in the countries of its two main rivals by means of bail-outs and other financing methods, which is preserving excess capacity.
"They are not disposing of the facilities, but they are preserving their capabilities. Instead of pushing for extraordinary productivity expansion, they must engage in more radical efforts," Nambu said. "Financing is a process that does not go beyond the scope of protecting pride. More rigid measures need to be taken. Even the Korea Shipbuilders' Association feels the same way," he said.
Nambu appealed to South Korea and China to look to the Japanese approach to industry rationalisation that shipbuilders took in the late 1970s and 1980s Japan semi-compulsorily eliminated more than 50% of its shipbuilding capacity in two distinct waves: initially after the first oil crisis and again after an extraordinary rise in the value of the yen in the 1980s.
Nambu called for Asian shipbuilders to cooperate during the time of difficulty: "This is the time for us to cope with the problem by uniting and closely exchanging information so that the plunge in ship prices and the pressure brought about by order cancellations will not cause us to easily make compromises."