I recently participated in a Council on Foreign Relations Task Force on Space. It concluded, not surprisingly, that the US must prioritize all elements of US space development or risk ceding leadership to China. The world now depends on space assets for economic and national security, a dynamic China deeply understands.
The same can be said for global shipping and navigational freedom on the seas. Except China already has a long lead in global shipping. China recognized that growth of the global economy and China’s position depends on dominating shipping. In successive five-year plans they shrewdly plotted and executed a strategy to achieve dominance. The US largely ignored shipping whilst preoccupied with Iraq, Afghanistan and the global war on terror. The 600-ship Navy that was a high priority during the Reagan Administration was forgotten, but not before naval warship construction choked off US capacity to produce competitive merchant ships. This capacity is virtually extinct today.
The US is waking up, as are our allies. In his State of the Union speech to Congress, President Trump called out the American shipping problem and is charging an office in the White House to attend to it.
The statistics that scream the message about China’s critical lead are obvious. A US Trade Representative (USTR) report issued 16 January 2025 (i.e. the week before the Trump inauguration) contains a litany of statistics in support of their conclusion that China is achieving dominance through unfair aggressive and anti-competitive trade practices.
A short quote from the report conveys the situation:
“China’s industrial targets have become more aggressive and sophisticated over the years. For
example, in the area of high-technology ships, China initially set a target of 20 percent of global
market share by 2011, but now aims to achieve 50 percent global market share by 2025. For
maritime engineering equipment, China initially targeted 10 percent of global market share by
2011, and now seeks 40 percent market share by 2025.
China’s targeting of these sectors for dominance has 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.”
(See full report, it’s really compelling: https://ustr.gov/sites/default/files/enforcement/301Investigations/USTRReportChinaTargetingMaritime.pdf)
Of course, China’s “whole of planet” strategy to rule shipping includes dominating ports and shipping choke points. The recent deal by a BlackRock-led consortium to acquire key port assets of the Panama Canal (as part of a large deal including 43 port facilities in 23 countries) was a surprising bit of good news. However, I deeply suspect (and so do many China and shipping experts) it will never happen.
CK Hutchison Holdings, owned by Hong Kong billionaire Li Ka-Shing, agreed to the deal without without consulting Beijing. Reports say he is now the target of Beijing’s anger for allowing this big crack in China’s global shipping dominance strategy. In a reverse of the Tik Tok situation President Xi Jinping can doom this deal and probably Li Ka-Shing too. Recall Jack Ma, of Alibaba fame and fortune. He got cross-threaded with President Xi and the CCP. Suddenly he went very quiet while the government cracked down on private enterprise. It’s been a few years, but Jack Ma still maintains a very low profile. Reportedly he has lost more than half his net worth (though still in the billions according to Forbes).
So, how should address this problem? China’s predatory actions to control the world’s lifeblood of commerce cannot be fixed by resurrecting old US shipyards. Even imposing million dollar docking fees (as proposed by the USTR report, and now the Trump Administration) will not magically create modern shipyards. That would take a decade or more, massive investment, and then may not be profitable without continued support from high docking fees for competitors. To begin to match China’s shipping strength we need to align with Allies with modern commercial shipbuilding yards. Korea is one. There are others.
But even if we coordinate with Allies on new efficient shipbuilding capacity, this will not be enough. We need to make a technological leap—that’s what we’re good at—and there’s a looming opportunity for an advance in commercial shipping. In the way that reusable rockets transformed space launching, small modular nuclear reactors (SMRs) can transform the commercial shipping.
SMRs of various sorts are advancing in commercial development. They offer one of the best renewable power solutions for the planets ballooning need for electricity (think data farms among other things). Public neuralgia from nuclear power plants is correctly diminishing. The SMRs are as different from the giant reactors that created the nuclear meltdown nightmares (Three Mile Island) as dial telephones are to an Apple 16.
The concept of nuclear ship propulsion is not new of course. The US Navy has operated nuclear powered submarines and aircraft carriers for over 60 years. The benefits are numerous. For one, no refueling for years on end. And besides saving fuel costs and related time, there is the absence of emissions from thousands of ships every day all over the planet. Safety is also greater because modern nuclear sources are composed of encapsulated pellets that are far more resilient than conventional reactor sources.
To be sure, safety and regulatory hurdles will need to be addressed, but the benefits certainly merit the investment. Nuclear innovation has been stymied for decades. But, if any US administration can fix the lethal permitting process, this one can. Facilitating a technological leap in the staid, but vital shipping industry would be a real and tangible breakthrough. If the US and its allies do not seize this opportunity to shape the future, no doubt, China will.
For a good summary (2 pages) of the China’s shipping dominance see: https://gcaptain.com/why-chinas-targeting-of-the-maritime-logistics-and-shipbuilding-sectors-for-dominance-is-important-to-the-united-states/