Japan weighs ‘national shipyard’ to revive shipbuilding sector

The Japanese government and ruling Liberal Democratic Party are drafting policies to revitalize the country’s shipbuilding industry, including a plan for the government to construct or rehabilitate shipyards.

The proposal was submitted to Prime Minister Shigeru Ishiba on Friday by the LDP’s Headquarters for Promoting Economic Security, chaired by Takayuki Kobayashi, an LDP lawmaker who formerly served as economic security minister. The proposal urges that a detailed plan be produced by the fall, outlining specific support measures, a timeline for implementation, and the predicted levels of public and private sector investment.

U.S. President Donald Trump is pushing to revitalize the American shipbuilding industry as a response to China’s growing naval presence and as part of a bid to boost domestic industry. Japan has proposed shipbuilding cooperation as a bargaining tool in ongoing talks regarding Trump’s tariff scheme.

“Reviving the shipbuilding industry is critically important for our economic security,” Economic Security Minister Minoru Kiuchi said at a news conference on Friday. “We will work with the Ministry of Land, Infrastructure, Transport, and Tourism to strengthen supply chains and ensure a stable vessel supply.”The initiative will need around 1 trillion yen ($6.9 billion) in public and private investment, and the government is considering the establishment of a fund that can be used for capital investment. The fund could be added to a supplementary budget for fiscal 2025 that will be compiled as early as this fall.

The proposal is also intended to tackle the labor shortage in the shipbuilding sector.

The number of workers in shipbuilding in Japan, including foreign labor, decreased by more than 10,000 compared to five years ago to approximately 71,000 in 2024, according to the transport ministry. The government plans to establish training hubs in shipbuilding-heavy coastal areas and may expand the intake of foreign workers and technical training programs for them.

Japan relies on maritime transport for 99% of its trade volume. Meanwhile, the domestic shipbuilding industry has seen its production capacity shrink due to labor shortages and aging infrastructure, resulting in a loss of market share to Chinese and South Korean competitors.

Japan’s shipbuilding volume fell 31% over five years to 10.05 million gross tons in 2023. In contrast, China and South Korea each increased their output by around 30%, reaching 31.48 million and 18.35 million gross tons, respectively. The number of shipbuilding facilities, including docks and slipways, fell from 194 in 2018 to 178 in 2024.

Kobayashi, the former economic security minister who led the proposal, emphasizes the importance of public-private cooperation to roll out strategic policies to boost investment. “The goal is to rebuild Japan’s maritime industry so the country can transport goods on its own, without relying too much on other countries,” he said.

Central to the LDP proposal is the concept of a “national dock,” under which the government would take the lead in constructing and equipping shipyards.

The idea is for the government to build or acquire shipbuilding facilities and entrust their operation to the private sector, under existing economic security laws — the Act on Enhancing Defense Production and Technology Bases and the Act on the Promotion of Ensuring National Security through Integrated Implementation of Economic Measures.

The proposal also calls for the designation of hulls as “specified critical products,” aiming to make ships and warships eligible for fiscal aid as goods needing a stable supply and to reinforce overall supply chains.

Source: Nikkei Asia

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