How China Benefits from a Side Effect of the Global Slowdown

As global trade declines, the need for ships declines.  As the need for ships declines, the viability of shipyards and shipbuilding declines.

That makes for a worrisome trade and national security scenario in the next five years because it is likely to benefit China drastically, according to Lloyd's List :

However, the authors believe China, which has as taken enormous trouble to guarantee long-term sources of raw materials and plan its expansion of steel production and shipbuilding capacity, is likely to take a different approach. 

"In the face of the same factors of cancellation and non-payment, China is likely to continue building vessels on schedule through 2009-2012, but now for its own account. 

"As its national fleet grows, it will give preference to its own vessels against tonnage chartered from the free market." 

As a result, they believe it is quite possible China will control, directly or indirectly, more than a third of the world's dry cargo fleet by 2012. 

China could then use its muscle to dominate free markets to the nation's own advantage which, in turn, could provoke a response by the US, the European Union, Russia and India.