Amid Industry Growth, Carnival to Help Build China's First Cruise Ship


Carnival, a Florida-based cruise ship company, is set to help China build its very first luxury cruise ship. In October this year the company signed a Memorandum of Understanding (MoU) with the Chinese State Shipbuilding Corporation, in an agreement that will also include Italy’s Finacantieri SpA.

The cruise industry in China has been growing rapidly, and by 2017 the nation is widely expected to become the world’s second largest cruise market after the US. By 2020 there may be as many as 4.5 million Chinese passengers aboard luxury cruise ships, according to Chinese government projections. While China has for many years been a leading producer of industrial ships, the luxury cruise industry is a new market set to create thousands of new jobs in the US and in Asia.

Carnival is currently the largest player in the cruise industry, with over 100 vessels across ten brands. As part of the deal, the company will provide ship design and shipbuilding expertise for a Chinese-built cruise ship. Additionally, the MoU stipulates future opportunities, including the formation of a domestic cruise company to further capitalize on the growing Asian market.

This reflects a trend in the luxury cruise market, in which companies are shifting their attention towards Asia, and away from traditional markets such as the US and Europe. Royal Caribbean, the world’s second largest cruise company which is also based in Florida, recently announced plans to move its brand new vessel ‘Quantum of the Seas,’ to Shanghai, bucking an industry trend in which only older ships are sent to Asian countries.

There are currently dozens of American-owned cruise ships based in the Asia-Pacific region. In Australia, the cruise industry has grown an average of 20% each year over the past decade, prompting Carnival to add two new ships to its fleet down under. In addition to the Australian fleet, there are four American vessels currently based in China, two in Japan, and another two in Singapore. The cruise line industry nets billions of dollars in revenue every year, supporting tens of thousands of American jobs. Each new ship requires somewhere between 800 and1,500 employees, and projections of the industry’s growth suggest that 26,000 new jobs will be created in the next few years.

Jonathan Gordon recently graduated from the University of Sydney and is a Research Intern at the East-West Center in Washington, D.C.