China's shipbuilders strive to navigate economic cold

"This is a tough year for us," Lin said.

Experts attribute the poor performance to a range of factors ,including dwindling global demand, lack of high-tech ships and China's excessive shipbuilding capacity.

Sailing on troubled water

For years, China remained the world's biggest shipbuilder, but now the market is changing.

On the Wukuishan Island in Zhoushan, what was once the country's model shipbuilding center is now a deserted island.

Wuzhou Shipbuilding Co Ltd, located on the island, once took up more than 10 percent of China's shipbuilding market. In 2014, the company produced 12 percent of the country's ships. Only a year later, it went bankrupt.

"I think the failure of Wuzhou is partly a reflection of overcapacity in the market," said an official with Zhoushan's Economic and Trade Commission.

Zhuang Jianjun, deputy general manager of Zhongyuan Shipbuilding Co Ltd, agrees.

"The global demand for new ships is about 50 million DWT annually, but the global capacity is at 100 million DWT, so that means about almost half of the world's shipbuilders will be wiped out," Zhuang said.

Another problem is China's making of mid- and low-end ships, which do not meet market demand, according to Chen Daxi, an official with Zhejiang Shipbuilding Engineering Association.

"China mainly makes dry bulk carriers, which are of low-technology and are easily affected by changes in the shipping industry," Chen said. "In recent years, high-tech ships like the LNG carriers have seen significant growth."

The Republic of Korea is now taking ship orders away from China by building high-tech ships, according to Chen, while Japanese shipbuilders are also posing a threat by leveraging its depreciating currency.