The Ramifications of China’s Maritime Equipment Industry Policies for the EU

Abstract

ABSTRACT This article utilizes strategic trade theory (STT) to assess China’s build-up of its maritime equipment (ME) industry. It does so by analyzing how maritime equipment has been addressed in Five-Year-Plans (FYPs) on the development of the maritime economy since 2013. Thus, it illustrates the importance of constructing integrated demonstration development zones and building-up technological capacities for the ME industry’s development. It also details the Chinese government’s objective to develop national champions in the ME industry, which corresponds with the broader context of China’s Innovation-Driven Development Strategy (IDDS) since 2016. Though trade data illustrates China has not yet taken over the EU’s current leadership position in the ME value chain, it does signal that dependence on the EU has been inversed for several categories of the ME industry. EU policymakers need to reflect on the possible ramifications of China’s approach for both the EU’s economic and security domains in deciding on if, how, and to what degree the EU and its member states should address China’s ME build-up.