China State Shipbuilding Co (CSSC) and China Shipbuilding Industry Corp (CSIC) are eyeing a potential merger.

Talk is rife in the local market that the two state-owned conglomerates, which account for more than half the nation’s shipbuilding output, will join forces if the dismal market continues.

In what is seen as preparation for the merger, Beijing is transferring CSSC chairman Hu Wenming to northern entity CSIC, leaving the latter’s vice-president, Dong Qiang, to take charge of the southern group.