Shipping Tug of War: Part 1 of 3
Australian navy's newest boats made in China, Chinese PLAN ‘Freedom Of Navigation’ near Australia, China Has 62.42% of all new ship orders globally, US Finds China ‘Unreasonable’ in Shipping
Australian navy's newest boats made in China
Documents uncovered by the ABC have revealed new tug boats ordered for the Australian navy have been constructed in China.
A $28 million contract for "marine craft" was awarded to the Dutch company Damen last year. Defence says the tug boats will be operated by civilian contractors but it has the option to "crew the vessels in rare situations".
A new fleet of tug boats ordered for the Royal Australian Navy by the Defence Department was secretly built at a Chinese shipyard under a $28 million contract awarded last year to a Dutch company.
Certification documents uncovered by the ABC reveal the first of three "harbour tugs" was completed in late December at the Damen company's "state-of-the-art" Changde facility in Hunan province, before being delivered to Darwin earlier this year.
In a letter sent from its Netherlands headquarters last year, Damen told the Defence Department the tug boat build "will be heavily reliant upon established supply chains both in Australia and overseas" but did not specify any work would occur in China.
"Therefore, to maximise opportunities for competitive (local) industry, Damen will implement proven systems and processes established that will ensure value-for-money for the Commonwealth of Australia," the company wrote in December.
According to the Damen correspondence, the second of its Azimuth Stern Drive (ASD) 2111 tug boats was due to arrive in Australia by May this year, but the ABC has confirmed a third vessel will also be delivered before the end of 2025.
"It is firmly understood that the Commonwealth of Australia needs a partner with this endeavour who has significant shipbuilding and sustainment experience and is willing to share knowledge, appropriate intellectual property and individual skills."
"The value of the Contract is approximately $28 million with an Australian contract expenditure percentage of 47% of the procurement of the 2 x ASD 2111 for the sustainment of the tugs over the life of type (est. 25 years)," the Damen letter states.
In a statement Defence confirmed the tug boats are being built in China with a subsequent "fit out" occurring in Vietnam, but insisted they were not "Royal Australian Navy vessels, and will be operated and crewed by a civilian vessel operator".
A Department spokesperson told the ABC it is "retaining the option to crew the vessels in rare situations such as emergencies" and that similar tug boats have "provided harbour support to Defence for more than 10 years".
Defence has declined to comment on if any possible Australian build options were examined, or whether the new 50-foot tug boats would be used to support visiting international warships.
Responding to the revelations, the Opposition said Defence Minister Richard Marles had "serious questions to answer" including what he knew of the Chinese build and any security mitigations that might be needed.
"Did Australia's Defence Minister give the green light for two Royal Australian Navy vessels to be built in a Chinese shipyard or was he not across his brief?", Opposition Defence spokesman Andrew Hastie demanded to know.
"This is just another example of shocking mismanagement of Defence under the Albanese Government, and why Labor cannot be trusted with Australia's national security."
Mr Marles is yet to respond but in 2016 Labor heavily criticised the then Coalition government after the ABC revealed new Australian Army uniforms had been made in China under a contract awarded to local company Australian Defence Apparel (ADA).
Last year, a Damen design was selected as the preferred option for the Australian Defence Force’s new Landing Craft Heavy fleet, with eight of the vessels to be constructed in Western Australia by Austal.
https://www.abc.net.au/news/2025-04-24/australia-navy-boat-made-in-china/105205286
Chinese PLA Navy’s ‘Freedom Of Navigation’ Near Australian Coast Sparks Frenzy In Aussie Media
By Sakshi Tiwari
Chinese warships first spotted sailing near Australia a week ago are now moving far south along its east coast, further escalating tensions between the two countries. The development comes as the Commander of the US Indo-Pacific Command, Samuel Paparo, is visiting Australia.
The three People’s Liberation Army Navy (PLAN) vessels reportedly include the Jiangkai-class frigate Hengyang, the Renhai-class cruiser Zunyi, and the Fuchi-class replenishment vessel Weishanhu.
The vessels were observed traversing the Coral Sea last week on their way to waters near the northeast of Queensland, Australia. At the time, the movement was understood to be routine even though it came immediately after a Chinese J-16 fighter jet fired flares in front of an Australian P-8A reconnaissance aircraft over the South China Sea.
However, in an unusual development this week, the warships have been noticed going far south on what is referred to as an “unknown mission.” Financial Times reported on February 19 that the Chinese vessels were seen 150 nautical miles off the coast of Sydney.
Notably, this is the furthest down the east coast of Australia that the Chinese ships have traveled. Beijing is seen as trying to normalize its power projection in Pacific waters, especially in the region that is traditionally considered an Australian bastion.
Australian Defense Minister Richard Marles told reporters that Royal Australian Air Force aircraft and naval vessels were monitoring the movements of the PLAN vessels in international waters within Australia’s exclusive economic zone (EEZ)—the region outside of its territorial borders where a country has exclusive economic rights.
The difference between a territorial sea and an EEZ is that the former confers full sovereignty over the waters, while the latter grants “sovereign rights” to the coastal state over the resources beneath the sea’s surface. The surface waters of an EEZ are considered international waters. Thus, it would not qualify as a breach of international law unless the ships enter Australia’s territorial waters.
The transit near Australia could be considered akin to the ‘Freedom of Navigation’ operations regularly undertaken by naval vessels belonging to the West in the Chinese backyard. Australian and US warships have traversed the South China Sea and the Taiwan Strait on multiple occasions.
Richard Marles said the movement was unusual but not unprecedented. “Just as they have a right to be in international waters… we have a right to be prudent and to make sure that we are surveilling them, which is what we are doing,” he added.
The Defense Minister further noted that his military was keeping tabs on the movement of the ships to assess the nature of their mission. “Whenever this mission is over on the part of the Chinese task group, we will assess everything we have seen to make a proper assessment of exactly what they were trying to achieve through this mission,” he said.
When Chinese Foreign Ministry spokesperson Guo Jiakun was asked about the movement of Chinese warships near Australia, he said he was not aware of the situation.
It is not uncommon for Chinese warships to appear near the waters of rival countries. For instance, the United States Coast Guard reported in July last year that it discovered three Chinese vessels approximately 124 miles (200 km) north of Amchitka Pass in the Aleutian Islands in the Northern Pacific Ocean.
However, while Australian authorities have projected the recent mission as innocuous, it could further damage ties between Canberra and Beijing.
Last week, for instance, the two sides engaged in a heated exchange when Australia protested the firing of flares in front of its aircraft. China hit back, saying the incident was a “deliberate intrusion” into its airspace. The Chinese foreign ministry said Australia “jeopardized” China’s national security.
The bilateral relationship between the two countries has been on a downward spiral for the last few years. Australia has been concerned with China’s onward march into the Pacific and forging ties with the Pacific Island Countries (PICs). For example, China signed a security agreement with Solomon’s Island in 2022, igniting fears that China could use the military base in the country to station its naval vessels there.
More recently, the newest Chinese Type 055 Guided Missile Destroyer, ‘Xianyang’ (108), docked at Port Vila in Vanuatu (just 3,700 kilometers from Australia) on October 21, 2024, unsettling Canberra.
On its part, Australia has closely aligned itself with the US to counter-balance the rising Chinese influence in the Indo-Pacific.
Despite these frictions, the two sides have made efforts to fix ties intermittently. Australia hosted the Chinese Foreign Minister Wang Yi last year after a gap of six years and claimed to have stabilized long-strained relations.
China’s Criticism In Australia
Intriguingly, the latest incident occurs while the Commander of the US Indo-Pacific Command, Samuel Paparo, is visiting Australia.
Admiral Samuel J. Paparo, commander of the U.S. Indo-Pacific Command, and U.S. Chargé d’Affaires to Australia Erika Olson participated in a think-tank discussion at the Australian National University in Canberra on February 19, 2025.
Paparo has consistently highlighted China’s growing military capability and expressed cynicism about its intentions. Earlier this month, Adm. Sam Paparo said the “aggressive maneuvers around Taiwan right now are not exercises as the Chinese military says,” adding the Chinese government is “on a dangerous course.”
Paparo said at the Honolulu Defense Forum that the Chinese operations, which included the deployment of numerous spy balloons, military aircraft, and navy vessels near Taiwan, are “rehearsals for the forced unification of Taiwan to the mainland.” Furthermore, he claimed that China’s “increasingly complex multi-domain operations demonstrate clear intent and improving capability.”
Similarly, in November 2024, Adm Paparo said China was America’s “most capable potential adversary in the world.”
Paparo also presented a concerning image of American preparedness, highlighting aging platforms, maintenance backlogs, and depleting ammunition supplies. He asserted, however, that the US still has a “generational advantage” in submarines and “war-winning advantages” in cyber, counter-space, and space.
https://www.eurasiantimes.com/chinese-warships-are-in-australian-eez/
China Secures 62.42% Of All New Ship Orders Globally, Per Latest Data
China has once again become the world’s top shipbuilding nation by securing 62.42% of all new ship orders globally.
By MI News Network March 17, 2025 Shipping News
According to data from Greek shipbroking firm Intermodal, China received orders for 3,454 out of the 5,735 vessels in the current global order book, totaling 175.4 million gross tons.
South Korea holds the second position with 21.39% of global orders, accounting for 687 ships, while Japan follows in third place with an 8.83% share, securing 651 vessel orders.
Together, these three Asian nations dominate over 90% of global shipbuilding, largely due to increasing demand for clean fuel-powered ships.
Per reports, the world’s dual-fuel fleet has grown to 2,119 vessels, driven by stricter environmental regulations and better financial support for sustainable shipping.
The US shipbuilding sector accounts for a small fraction of the market, totaling around 245,000 gross tons. These mainly include tugboats and passenger or cruise ships.
However, analysts suggest that the US has strong potential for expansion due to its financial strength, advanced military shipbuilding expertise, strategic international partnerships, and government support for reviving the industry.
Intermodal senior analyst Nikos Tagoulis commented that while China, South Korea, and Japan remain dominant, emerging players such as the US, India and Vietnam, are working to strengthen their market presence and challenge the current global shipbuilding hierarchy.
The US Trade Representative (USTR) recently described China’s dominance in the maritime and shipbuilding sectors as “unreasonable” and “burdensome” for US commerce. Ambassador Katherine Tai said that while China builds more than 1,700 ships per year, the US constructs fewer than five.
In response, the US is considering imposing new fees on Chinese-built ships entering American ports. A recent proposal from the USTR suggests a charge of up to $1.5 million per Chinese-built vessel to counter China’s growing influence in global shipping.
Last week, US President Donald Trump unveiled a major plan to restore the nation’s shipbuilding industry. Speaking to Congress, he announced the creation of a new Office of Shipbuilding within the White House and proposed special tax incentives for US shipyards to bring manufacturing “back to where it belongs.”
The US government has drafted an executive order, some of the key measures in the order are:
Maritime Security Trust Fund to provide financial support for shipbuilding projects
Six-month expansion plan to increase US shipbuilding capacity and workforce development
Trade restrictions on China to limit the import of Chinese-built vessels
Tax incentives to encourage domestic ship production
Higher wages for shipyard workers to attract skilled labour
Investment in maritime infrastructure to modernise US shipyards
China has strongly opposed the proposed US tariffs on Chinese-built vessels. In a press conference on March 7, 2025, China’s foreign ministry stated that such measures would disrupt global supply chains without necessarily reviving US shipbuilding.
Beijing warned that trade restrictions could harm international industrial cooperation and affect the maritime economy worldwide.
Among European nations, Italy has seen a 67% year-on-year increase in its shipbuilding order book for 2025, mainly due to rising cruise ship orders at Fincantieri shipyards.
Vietnam has ranked fifth in the global shipbuilding market. In 2024, Vietnamese shipyards increased output by 40% in terms of gross tonnage compared to 2023, and 61% since 2022.
The country’s current order book of 2.82 million gross tons reflects a 29% year-on-year growth and a 148% rise since 2022.
Reference: breakwaveadvisors
https://www.marineinsight.com/shipping-news/china-secures-62-42-of-all-new-ship-orders-globally-per-latest-data/
USTR Finds China’s ‘Unreasonable’ Policies in Shipbuilding, Maritime, Logistics Sectors Restrict U.S. Commerce
On January 16, 2025, the U.S. Trade Representative (USTR) determined, pursuant to Section 301 of the Trade Act of 1974, that China’s targeting of the maritime, logistics, and shipbuilding sectors for dominance is unreasonable and burdens or restricts U.S. commerce. In a detailed, 182-page report accompanying the determination, USTR examined decades of industrial policy planning, dating back to the 10th five-year plan period in 2001-2005, in which the Chinese government sought rapid expansion of both shipbuilding capacity and market share in international logistics. The report details discriminatory, non-market policies and practices including government direction of both state-owned and private companies, extensive government financial support, unfair labor practices, support for excess production capacity of key shipbuilding inputs like steel, and state-directed industrial consolidation.
The report concludes that these policies, as applied to the shipbuilding sector, have “undercut competition and taken market share with dramatic effect, raising China’s shipbuilding market share from less than 5 percent of global tonnage in 1999, to over 50 percent in 2023; increasing China’s ownership of the commercial world fleet to over 19 percent as of January 2024; and controlling production of 95 percent of shipping containers and 86 percent of the world’s supply of intermodal chassis, among other components and products.” The report describes the wide-ranging, negative impacts of China’s policies, including:
Depriving market-oriented businesses and their workers of commercial opportunities;
Eliminating competition in global markets;
Increasing risk and reducing resilience in global supply chains by creating dependencies on Chinese suppliers; and
Undercutting business opportunities for and investments in the U.S. maritime, logistics, and shipbuilding sectors.
In its assessment of the role that non-market excess capacity in the steel sector plays in giving China’s shipbuilders an unfair competitive advantage, USTR cites Wiley’s recent study of Chinese industrial policy in the steel industry, Shell Game: Case Studies in Chinese Steel Subsidies, which is available here.
USTR will conduct future proceedings, including any further hearings or solicitation of additional comments, to determine what actions, if any, to take as a result of this determination. The statute requires USTR to complete Section 301 investigations that do not implicate trade agreements within 12 months of initiation. The investigation was initiated on April 17, 2024, on the basis of a petition filed by five national labor unions. As a result, any recommended actions in response must be made on or before April 17, 2025.
Wiley has robust International Trade, Supply Chain, and Customs practices with extensive experience helping clients navigate Section 301 and broader trade issues. Should you have any questions regarding the Section 301 exclusion process, please contact one of the listed attorneys.