(3) Shipbuilding industry and ship machinery industry

1) Measures for reinforcement of the international competitiveness of the shipbuilding industry

Due to the increase of seaborne trade accompanying the thriving global economy, until the autumn of 2008, the amount of newly built ships in 2008 was 67.69 million tons (the amount of new ship construction in our country was 1,866 million tons, 27.6% of the global amount) and the maximum was recorded continuously from 2007. However, after the autumn of 2008, the orders for new ship construction fell sharply because of the slowdown of the global economy. Moreover, the shipbuilding industry in our country had a healthy order book and was comparatively stable, but the future of the global shipbuilding market is becoming unclear.

Additionally, the medium-sized and small shipbuilding

industry that provides ships for domestic marine transportation contributes to regional economic development and employment creation through deep-rooted production activities in each region of the country. The demand for ships for domestic transportation has been recovering since 2002, but the number of orders has been falling as sharply as the global shipbuilding market after the autumn of 2008 and the business base is becoming extremely weak.

The shipbuilding industry in our country has been maintaining a local production system and has been maintaining a share of the amount of new ship construction in the world’s top level through the past 50 years. However, because of the

intensification of international competition due to the rapid expansion of the construction capabilities of South Korea and China and concerns over the high levels of retirement of skilled workers who sustain the shipbuilding skills and technologies of our country, the severity of the business environment is worsening. Furthermore, it is necessary to prepare corresponding measures towards increasing social awareness on the environment and security.

As a result of these circumstances, in order to differentiate from the other competing countries in terms of technological ability, different measures are being worked out with regard to social requests such as earth environment conservation and energy saving. Measures include support for training skilled workers and technicians who shoulder the shipbuilding industry and international cooperation for substantial development of the shipbuilding industry through places such as the Council Working Party on Shipbuilding in the Organization for Economic Cooperation and Development (OECD).

2) Measures for invigorating the shipping industry

Concerning the shipping industry, reflecting the recent great demand for newly built ships, the production quantity of shipping products in our country in 2008 was 1 trillion and 3,651 billion yen (an increase of 4.9% when compared with that of 2007); while the export amount was 4,240 billion yen (an increase of $ \sim $ 12%). Both of these figures are significant increases.

However, as a result of the drop in newly built ship orders due to the slowdown of the global economy, intensification of international competition, the aging of workers, the conditions of the shipping industry will be much more severe. Moreover, the social demand for the security and conditions of the shipping industry, such as regulation reinforcement of exhaust gases from ships, is increasing. Therefore, in order to strengthen the foundation of the shipping industry and the international competitiveness of our country, the improvement of technology and productivity by strengthening cooperation with the shipbuilding industry, the utilization of various support measures and the inter-country agreement on imitative product policy, etc., are being worked out.