China plans to combine its two largest shipbuilders, China Shipbuilding Industry Corp. (CSIC) and China State Shipbuilding Corp. (CSSC), in Beijing’s latest attempt to supersize state-run businesses for global competition, reported the Wall Street Journal.
If approved, the merger would create the world’s second-largest shipbuilder. Last year their combined orders by tonnage accounted for roughly 13% of the global total, according to their annual reports.
CSIC was split off from CSSC two decades ago, when Beijing was looking to spur domestic competition by breaking up some huge state conglomerates. Several of these demergers have since been reversed, as Beijing looks to give state-run companies heft to compete around the world.
“The consolidation drive is about improving the competitiveness of these industries and to compete in global markets,” said Tommy Wu, a senior economist at analysis firm Oxford Economics.