Driven by rivalry with U.S., China creates world's no. 1 shipbuilder

In $16 billion deal, Beijing looks to counter Trump's moves to rebuild American shipyards

- Clarence Leong & Costas Paris

$16 billion merger of two state-controlled shipbuilders in China is set for completion this week, creating the world's biggest shipbuilder while the U.S. searches for a path back into the business.

American shipbuilders are playing catch-up after decades of maritime-industry decline, though President Trump's ambitious plans to revive American shipbuilding have hit snags recently. In the shorter term, Trump's threat to impose higher fees on ships made in China is giving South Korean and Japanese rivals an opening to win back market share.

The Chinese champion is called China State Shipbuilding, or CSSC. This week it is scheduled to absorb its merger partner, China Shipbuilding Industry, and take the sole listing on the Shanghai Stock Exchange after regulators recently approved the deal.

The merged company hopes to use its bulk to cut costs and help it ride out industry turmoil brought on by Trump's moves.

The two companies were originally one and split up in 1999, when the government wanted to promote competition. These days, Beijing is looking to consolidate state-led companies in sensitive industries, particularly those connected with the military.

CSSC's main business is commercial, but it is also an important contractor for the Chinese navy. The company it is absorbing designed and built China's first homegrown aircraft carrier, the Shandong.