CHINA's shipyards won more business this year than they did in all of 2012, but those orders were taken by only four per cent of the nation's 1,650 shipbuilders.

Chinese yards won 39.5 per cent of global orders in the first half compared with 36.5 per cent for South Korea, reversing last year's trend.

But figures compiled by Reuters and shipbrokers show 60 state-owned and private shipyards won about US$10.5 billion worth of contracts from foreign and domestic shipowners for vessels totalling 21.2 million dwt in the first half.

Most had backing from two shipping "policy banks", which are responsible for state-directed spending and trade development.

"We believe that the major yards that have won orders this year will be the ones left in five or 10 years and that they represent the future shape of China's shipbuilding industry," said Hamburg-based Ernst & Young analyst Gunnar Gerig.

Among the winners were shipyards in Shanghai, Guangzhou and Chengxi controlled by China State Shipbuilding Corporation and private builders such as Yangzijiang Shipbuilding (Holdings) Ltd and Zhejiang Yangfan.

The China Association for National Shipbuilding estimated there were 1,650 shipyards in China. A third to a half of them are expected to collapse within a few years.

Said ClarksonAsia's Martin Rowe: "There are only about 80-90 yards Chinese that we would recommend to our clients."

Graham Porter, co-founder of Vancouver's Seaspan Corp, a leading containership operator with 100 big ships, said owners today look to order at yards backed by state lenders or well-funded provincial or private yards as they represent lower risk.

Japanese yards experienced a similar bad patch in the 1970s and '80s and underwent a government programme to cut shipbuilding capacity by 50 per cent.

Said Norway's Fearnley Consultants analyst Sverre Bjorn Svenning: "It is quite obvious that the Chinese shipbuilding industry is in a painful transition. If Chinese yards are to succeed they must have a good home market and cannot rely on exports."