The shipbuilding industry became one of the most "worry" industries in 2012
June 28 03:34:12, 2025
In 2012, the real economy of China faced significant challenges, as highlighted by the joint report released by *China Economic Weekly* and the Ministry of Commerce's Credit Rating and Certification Center. The report revealed that the performance of the 20 major industries was negatively impacted by declining infrastructure and real estate investments. Additionally, factors such as reduced demand for raw materials—like steel, non-ferrous metals, construction materials, and chemicals—led to a sluggish economic environment. Overcapacity became a pressing issue across multiple sectors, with some industries teetering on the edge of widespread losses.
The overall trend for the year was one of slow but steady growth. According to data from the National Bureau of Statistics, industrial output from January to November 2012 increased by 10% year-on-year, expected to reach around 10% for the full year—a drop of nearly 4 percentage points compared to the previous year’s 13.9%. Both light and heavy industries saw their growth rates decline, with light industry at 10.2% and heavy industry at 9.8%, down by 2.8 and 4.6 percentage points respectively.
Profitability also declined during this period. From January to October, the profits of large-scale industrial enterprises reached 420 billion yuan, up just 0.5% year-on-year. Meanwhile, the profit margin on main business income dropped from 6.04% to 5.46%. Several key industries, including steel, building materials, photovoltaics, wind power, shipbuilding, textiles, and electronics, struggled with weak demand and operational difficulties, with some facing near-total losses.
The global economic recovery remained uncertain throughout the year, and China’s economy entered a phase of adjustment. With both domestic and international macroeconomic conditions deteriorating, pressure on the real economy intensified, leading to more challenges in production and operations.
Several key industries experienced particularly tough conditions. The textile sector, for example, suffered due to weakened international demand, slowing domestic consumption, and price disparities between domestic and foreign cotton. This led to a slowdown in production and exports, with companies at the beginning of the supply chain reporting increased losses.
The home appliance industry also faced a difficult year, driven by falling real estate demand and the replacement of old appliances. Market performance was weak, and major economic indicators saw a sharp slowdown, with growth rates dropping into single digits.
In the shipbuilding sector, completion volumes fell by 18.5% year-on-year, while new orders dropped by 46.9%. The continued sluggishness of the international shipping market contributed to these declines.
The steel industry encountered its most challenging year since the 21st century. Production and operations hit a low point due to slower global and domestic economic growth. Despite an acceleration in crude steel production capacity, demand remained weak, and rising costs combined with falling prices led to a sharp decline in profits. According to the China Iron and Steel Association, member companies saw only minimal profits, with many operating at a loss.
The rare earth industry also faced difficulties, with weak demand and accelerated restructuring causing a prolonged downturn. Prices for rare earth materials continued to fall, affecting companies like Baotou Steel, which reported a significant drop in revenue and net profit.
The cement industry, heavily influenced by reduced infrastructure and real estate investment, suffered from overcapacity and falling prices. Profitability declined sharply, with the cement sector seeing a 51.4% drop in profits compared to the previous year.
In the new energy sector, industries such as polysilicon, wind power equipment, and solar panels faced overcapacity concerns. The photovoltaic industry, in particular, was hit hard by the European debt crisis and trade restrictions from the U.S., which caused market instability. Similarly, the wind power sector struggled with overcapacity, with turbine prices dropping significantly and profit margins shrinking.
The electronics industry was also affected by weak international demand, with Chinese exports growing at a low rate. While revenue increased slightly, profits declined, and a large number of companies reported losses.
Looking ahead, the recovery in European and American markets remained uncertain, meaning that China’s electronic exports would likely face continued pressure. Overall, 2012 was a year of adjustment and challenge for China’s real economy, marked by slowing growth, declining profitability, and structural imbalances across multiple industries.