China's sanctions against the American divisions of the South Korean company Hanwha Ocean threaten ambitious plans for cooperation between Seoul and Washington in the field of shipbuilding, disrupting the supply of Chinese equipment and materials. This is reported by Marine Link with reference to officials in South Korea.
Beijing announced the sanctions last week when the US and China began charging additional port fees to each other's ships as part of the latest round of a protracted trade war ahead of a planned meeting between the leaders of the two countries.
View of the Hanwha Ocean factory in the suburbs of Seoul
Hanwha Ocean
Earlier, South Korea promised to "Make American Shipbuilding Great Again" (MASGA) and invest $150 billion in the industry to support US President Donald Trump's initiative to revive American shipbuilding in an attempt to catch up with China.
The official interlocutors of the publication in Seoul noted that the decline in the American shipbuilding industry and related industries has reached such a level that Washington cannot ensure the supply of necessary materials and components from its own sources.
"The impact is inevitable," Sok Jong–geun, head of South Korea's defense procurement program department, commented on the imposition of sanctions against Hanwha Ocean. "I don't see how it is possible to produce all materials and components for the Philly Shipyard only in the United States. If you are going to supply a lot of things from South Korea to the United States, but there are sanctions and all kinds of obstacles, then this will certainly affect the MASGA initiative."
Hanwha Ocean also operates a shipyard in the eastern Chinese province of Shandong, where modules of ship components are manufactured, according to corporate documents. These modules are being shipped to the company's shipyard in South Korea for final assembly.
Analysts note that Chinese sanctions will not have an immediate impact, but may be a harbinger of tougher measures by Beijing, which will affect South Korean shipbuilders cooperating with the United States.
South Korean MP Yoo Yong Won estimated that Chinese sanctions will cost the Philly Shipyard $60 million over the next two years. He did not provide detailed estimates, but pointed to possible supply disruptions and delayed delivery of ships.
"This is not just a free trade issue, but a serious issue affecting our economic security and industrial leadership," Yu said, adding that he visited the shipyard last month.
Philly Shipyard in Philadelphia was bought by Hanwha last year and is one of five American subsidiaries that have come under new Chinese sanctions.
Meanwhile, Hanwha's competitors in South Korea, Hyundai and Samsung Heavy Industries, are considering projects for the construction and maintenance of ships and auxiliary vessels of the US Navy.
Last Friday, October 17, the United States Department of State condemned Chinese sanctions as an "irresponsible" act that interferes with the activities of a private company and undermines cooperation between South Korea and the United States to revive American shipbuilding and manufacturing.
Hanwha Ocean declined to comment on the deputy's statement about possible losses.
The Chinese Ministry of Commerce has banned transactions and cooperation with American units of Hanwha Ocean, citing security risks associated with their participation in "relevant investigative activities" of the US government.
