Why are chinese shipbuilders incentivized to compete with eachother while US shipbuilders are not incentivized to compete with eachother? The answer is probably due to cartel behavior on the part of the american shipbuilders, which tends to happen in any industry that has coalesced into few enough players to get into a conference call. If the chinese are still innovating I would say it is because they are merely early in the inevitable march capitalism takes from smallholder to largeholder based industry. I would expect after several decades of mergers and acquisitions that the chinese shipbuilding industry begins to behave a lot like the American shipbuilding industry today, if they haven't already begun to do so.