restricted access Work Hard to Develop the Shipbuilding Industry
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20 3 Work Hard to Develop the Shipbuilding Industry1 October 5, 1991 After listening to your briefing, I see that there have been great developments in shipbuilding during the past decade, and the industry has already become oriented toward the international market. The growth of shipbuilding over these 10 years is in fact a product of reform and opening up and also a visible sign of the success of reform and opening up. In the past, we would not even have dared to think of exporting ships, but now shipbuilding is proving to be doing quite well at exporting. This is mainly because you have a grasp of the direction in which the industry is adjusting globally and have accurately judged global market conditions for ships. You’ve also adopted international standards, and from the very beginning you’ve paid attention to importing main engines and steel plate from abroad—this path is the correct one. Now we have to think about how to improve our ability to manufacture within the country. We can summarize many experiences from the development of shipbuilding over these 10 years. We’re currently on the eve of a major industrial restructuring. There are two main aspects to this restructuring. First, energy, transportation, and some raw materials are still backward. The power industry has improved in the past few years, but coal and oil are still very backward. Transportation has developed greatly, but it still lags behind national economic progress. There must be a major adjustment in energy, transportation, and raw materials, particularly in mining. Second, new difficulties have arisen because of redundancy in processing industries, a problem that has built up over many years. One-third to onehalf of production capacity in processing industries is surplus capacity, particularly in textile and general machine industries. Without readjusting, no one will be able to survive, and proposals for revitalizing large and medium state-owned enterprises will be nothing but empty talk. Without markets, however, how can there be revitalization? When production capacity is so large—20 million color TV sets, 15 million refrigerators and washing machines—whom will you sell all this to? If these processing industries don’t 1. Zhu Rongji made these remarks after hearing a work report at the head office of the China State Shipbuilding Corporation. Work Hard to Develop the Shipbuilding Industry 21 readjust, if industrial structure isn’t transformed, there’ll be no way to improve returns, and a considerable number of enterprises won’t be able to survive. The key to whether an industry can grow is whether it has markets, which means the shipbuilding industry should develop more quickly and to a larger scale because it has markets. For one thing, domestic ships that are over 20 years old will all have to be replaced and thus can provide a very large market. Second, international markets also operate in cycles, and the 1990s is a relatively prosperous period in this cycle. Look at the direction of development of the global industrial structure. Shipbuilding is labor intensive, capital intensive, and technology intensive. It’s incredibly grueling—work like removing rust from steel plate is very grueling, and nobody in the developed Western countries will do it [any more]. Therefore shipbuilding should be able to thrive for at least 20 years in a developing nation like ours, and because we have a large population, it might even continue to flourish over the long term, as it did in Japan. We must analyze this situation and recognize that developing shipbuilding should be one aspect of our industrial restructuring. We must clearly explain the importance of this industrial restructuring to the workers in shipbuilding, energize their spirits, boost their morale, and spur the shipbuilding industry. I feel that if it is to develop, shipbuilding must find its footing domestically and be oriented toward the world; it must move into international markets. [Thus far] Being briefed on the situation at Shanghai Jiangnan Shipyard on September 21, 1989. 22 Work Hard to Develop the Shipbuilding Industry our shipbuilding has been able to develop so quickly because it depended on importing technology and because it exported. Speeding Up the Shipbuilding Industry’s Growth To speed up the growth of the shipbuilding industry, we now have to concentrate on three tasks. First, We Must Focus Hard on Shortening the Production Time Required to Build a Ship. The first thing to tackle in shipbuilding is berths—berths are the jugular of shipbuilding. In shortening production cycles, it...