Yacht Building Success in China

The 46% tax that China imposes on imported boats is hurting European and US builders, hence the rise of new Chinese yards. This deficit will only get worse as Chinese yards come up to speed, becoming more accepted worldwide. It might explain why three relatively new (to the Western World) Chinese yards have started advertising on YachtForums, putting their name on the same playing field with some of the most recognized builders in the world.

Over the past few months, we've added Dyna, SeaFa and Sunbird. The latter was a real surprise. As we put together the latest front page feature, it became clear this is a production boat building superpower... and I had never heard of them before.

The playing field really needs to be leveled.

I've moved this thread to the General Discussion and retitled it for better indexing.

Yes, Sunseekers are really on fire lately...

http://www.gadgetsandgizmos.org/9-million-sunseeker-yacht-goes-up-in-smoke-as-owner-watches/

I just came back from a two week trip visiting builders in both Taiwan and China. Just like builders in other parts of the world, their quality can vary depending on the dedication of the builder. The builder that is willing to spend just a bit more for quality components will produce a better boat with fewer problems down the road. There is no denying that their interior work is outstanding. A few builders have some nice surprises coming soon.

Oops! My bad.

Just remember, if you go to China to build a new boat, this is what you have to eat during your stay...

(courtesy of Jorge Lang)

That would work as a good diet plan for me.

I know for many people that doesnt look too palatable, or even edible... Was there some time ago. But once you start, can't stop - most of it is either "normal" or even "very tasty".
If you do want to start, closing your eyes and skipping "what is it" question could help initially

As for boat building, same thing's happening as with automotive industry and many others. Yesterday, it was cheap and bad, today it's unexpensive and okay, those who remember (or merely know their history) "cheap Japan cars" can easily see where that's going.

Is the 43 % tax only due on imported boats? If it was a luxury tax imposed on all yachts, it would be justifiable for a country which wants to keep the income gap moderate.

But if it's a protectionist measure to promote their own yards - that's very questionable. In that case, the US and Europe will probably do the same with Chinese boats.
End result: Chinese buy Chinese yachts, Rest of World buys Rest of World yachts,
=> Less competition,
=> Poorer quality for higher prices.

I don't think Japan became a good carmaker by taxing foreign cars.

Bruno

The new tax proposal is for all yachts used in China and the 43% is an estimation as a total of import duties and "VAT" on luxury goods; http://www.chinadaily.com.cn/china/2011-02/24/content_12068458.htm

Yes they did.

Nycap,

Do you mean "Yes they taxed imported cars" or do you mean "Yes they became a good carmaker by taxing imported cars"?

I think that just that the import tax is not enough to turn your country into a good car maker. There's a few other ingredients needed..

Did the Jones Act (an even more draconic measure) turn the US into a great shipbuilding nation?

Bruno

Honest lol - I was about to reply just that, but failed googling prooflinks within the 3 spare minutes I had and stayed shut.

But yes, Japan became good carmaker by, among all else, taxing/supressing (you know, there are other ways to limit imports then just plain open tax) autoimport, plus the "cheap yen" strategy which is very, very similliar to "cheap yuan" China employs now. Which is, in very layman's, an economy-wide "export subsidy and import tax".

Now, we've got to watch the line of arguments here. Import taxes alone couldn't make good local industry, no doubt, but it could, and had proven, to be an important ingredient in the package.

Besides, love it or hate it, with things as they are now, China has a significant resource in any trade dispute there could be. Especially talking about "peripherals", e.g. secondary and tretiary segments of economy. Noone, including US, is going to trade war with China over luxury goods taxes.

The U.S. and Europe gave favorable tax/tarriff agreements to Japan as we do to China. Far better than what was given in return. Short story, we gave our manufacturing industries away thinking we could survive as a service industry economy and let them do the "dirty work". LOL. Will either now do the same for us? Not on your life. As for the Jones Act, were it not for that the U.S. shipbuilding industry would be completely non-existant instead of bleeding to death. Give it a few more years though. There is a movement afoot to gut the Jones Act. Then there will be no more American maritime workers, we can sell the ship building facilities to the Chinese with favorable tax plans so they can build condos for the vacationing Chinese and Japanese executives. But there is trouble afoot in those countries as well so who knows who the superpower will be in 20 years. It's a safe bet it won't be the U.S. though. Western nations do not think it's "fair" to be protectionist. Unfortunately, the word 'fair' does no translate in many other languages.

The rest of the post was so nice this line stuck out too sharply. There are too many examples of western nations being protectionist enough to even count. It is like a "knock between legs" move: civilized people rarely talk about it, less so without disdain, it gets banned in everything "sporting", but when push comes to shove, it's still one of the simpliest and most efficient ways to get "things done".
The parallel further translates well into reasons one could use protectionism or not, such as, thinking "it's not serious yet", fear of public shame, plain being "not civilized enough" to care and whatever else you'd think

If you can't beat them..........