In 1964, the Sixth Ministry of Machine Building was created[8] to oversee China's shipbuilding enterprises, which were predominantly engaged in military work.[9] In July 1982,[10] as part of defence industry reforms and "defence conversions", the ministry was converted into the China State Shipbuilding Corporation.[9] CSSC remained under state control but was permitted to operate with "a degree of market-based economic autonomy".[11] CSSC shifted the industry's focus to commercial work; by 1992, 80% of output was to the civilian sector,[10] and in 1993 half of the commercial output was for export.[12]
Spinning off CSIC
In the late 1990s, economic reforms broke up state-owned monopolies and introduced "a limited amount of free-market competition" to improve the efficiency of defence industries.[13][14] In July 1999, the China Shipbuilding Industry Corporation (CSIC) was spun off from CSSC.[14] The shipbuilding industry was divided roughly along geographical lines: CSSC retained assets in the east and south,[15] and CSIC gained control in the northeast and inland.[16] Both reported to the State-owned Assets Supervision and Administration Commission (SASAC).[17] CSSC emerged as the smaller entity.[15][18] Enterprises not affiliated with either conglomerate included shipyards owned by the People's Liberation Army (PLA), provinces, municipalities, foreign joint ventures, and Chinese shipping companies.[17][19]
Merging with CSIC
Preparations for merging CSIC and CSSC date back to at least 2010, when Hu Wenming became CSSC's party secretary, in anticipation of an industry decline.[20] Hu was a strong supporter of the merger; he was CSSC chairman from 2012 to 2015, and then CSIC chairman from March 2015 until his retirement in August 2019 because of corruption.[21] The decision to merge the conglomerates may have influenced not only by a slowing economy,[22] but also the discovery of widespread corruption in CSIC and Hu's involvement in it.[21][22][23]
The CSIC and CSSC merger was approved by SASAC in October 2019,[24][25] and occurred in November 2019; the combined entity took the CSSC name. The reorganization was complete by September 2020. The new entity was the world's largest shipbuilder with 20% global market share and US$110 billion in assets.[22]
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