For ship financing the government plays the role of

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For ship financing, the government plays the role of policymaker and resource allocator. TheKorea Maritime Promotion Corporation that would be established in June 2018 is an exampleof the regarding government effort. The support body for the shipping industry would offerfinancial support service including the guarantee for vessels and terminals (Herh, 2017). For R&D, the government support to R&D shows an increasing trend. One of the majorgovernment-initiated programs is the Shipbuilding Core Technology Development, which hasa budget on supporting the development of key shipping technologies. For example, thebudget amounts USD $21.8 million in 2014 (Wpon Shipping, 2014).Some others policies include educational and training programs. Notwithstanding that thereare various types of state support, the degree is relatively low comparing to other countries(Wpon Shipping, 2014). 4. Future of Shipbuilding Industry - Aspects to be improved, Forecast and SuggestionsBy summarizing the above aspects, it could be seen that the current situation in Chineseshipbuilding industry is expanding continuously. In contrast, the development of shipbuildingin Korea is gradually shrinking and lagging behind. On the other side, Japan is expected to bethe future leader in the environmentally-friendly sector of the shipbuilding industry. According to Mishra (2017), the key factors that are essential for determining the growth andlong-term survival of the shipbuilding industry are GDP, improved economic growth,international seaborne trade, fuel price, increasing urbanization, rise in global steelproduction, increased competition, environmental regulations, enhanced globalization,political and financial instability and state support. 5
Through integration and expansion, it is suggested that the future of the shipbuilding industryis differentiated by economic factors (e.g. economic growth), environmental factors (e.g.environmental regulations), technological factors, political factors (e.g. government support),social factors (e.g. enhanced urbanization) and competition. The following analysis wouldmainly focus on technological factors, so as to review if the countries would innovate tosurvive. 4.1 The Future of Shipbuilding Industry in ChinaEven though shipbuilding is a fast-growing industry in China, there are still a number ofimprovements could be made. Quality would be the most critical issue. Currently, China useslow costings (i.e. labour, land and raw materials) as the major selling point. However, thecontinuous growth of costs seems to be unfavourable for its future development. Hossain(2017) points out that China’s attempt to maintain the low-cost level may result in inferiorquality. The shipbuilding firms may want to use low-quality materials and hire workers withlow education level so as to save cost, resulting in the unacceptable quality of products. Thefailure in operation and quality management could impose a negative impact on thereputation of companies, leading to the reduction in revenue due to the decline of orders.

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