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The above numbers highlight the huge disparity between the export and domestic markets in China. While this article is concerned with the former, the problems facing the domestic market are likely to affect the industry as a whole for some years to come. There is no yachting culture in China and no infrastructure to speak of. Fewer than 10 marinas are operational (although more than 40 are at varying stages of development), and the status of yachting is totally unregulated. The Chinese Yachting Association (CYA) is working to remedy the situation, but this administrative headache will remain a major obstacle to the growth of mass yachting in China. All these issues have a bearing on production for export. How can Chinese boatbuilders be expected to meet the exacting standards of an American or European clientele when they have never actually seen a luxury yacht and have little or no concept of what yachting is all about?

The answer is to bring in outside help, and this is precisely what the leading yards in China are doing. Shanghai-based Marine Dragon Consulting has identified, of the 250-odd boat manufacturers in China, about 50 export-oriented manufacturers focusing on production boats. Of these, nearly all of them have some sort of foreign input in the form of expert consultants, joint ventures where the foreign partner injects the technical and marketing know-how or Wholly Owned Foreign Enterprises (WOFE). This is also a question of image and branding, and Chinese state-owned boatyards face an additional challenge in convincing the overseas market to buy their products. Even state-owned Shanghai Double Happiness Yacht (DHS), which ranks among the top 10 Chinese yards in terms of exports with more than 100 yachts delivered to date, has partnered with French Cortenzo Yachts and Italian Gianetti Yacht to serially produce 25- to 30-meter luxury motor yachts. There is no doubt that this foreign input has been instrumental in shifting the volume-driven Chinese mentality to focus more on quality.

Top: The Double Happiness canteen. Bottom: The mold shop at the Ocean Alexander shipyard on the Yangtze River. (Click images to enlarge)

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It comes as no surprise to learn that Taiwanese investors dominate the WOFE, accounting for as much as 70 percent of building investment and activity in China. The Taiwanese have been building yachts since the early 1960s and with their experience and common language were quick to cash in on China’s cheap labor pool and real estate opportunities. Hampton Yachts, for example, was one of the first Taiwanese boatbuilders to set up in Shanghai in 1992. Chairman Jeff Chen comes from a family that has been building the Formosa series of production yachts in Taiwan for more than 40 years. This experience has paid dividends in China where Taiwanese foremen oversee the construction of the 55- to 74-foot range of Hampton pilothouse yachts designed in collaboration with naval architect Howard Apollonio.

Fellow Taiwanese John Chueh heads the Ocean Alexander family shipyard near Shanghai, where there continues a 30-year collaboration with American designer Ed Monk Jr. to build pilothouse motor yachts from 46 to 58 feet (with plans to add a 66- and 68- footer this year) and a Taiwanese plant that builds larger models up to the top-of-the-range 98-foot cockpit motor yacht. Before setting up his own plant on the Yangtze River Delta in 2003, Chueh subcontracted another company to build in China, but the venture proved a failure mainly because the completed boats did not meet Ocean Alexander’s standards of quality. Today, Chueh has reverted to in-house construction and engineering and limits the company’s growth so as to keep a tight check on quality control.

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