A partnership between Japanese yard Mitsui Engineering & Shipbuilding (Mitsui E&S), trading house Mitsui & Co and China’s Yangzijiang Shipbuilding has the potential to create an Asian shipbuilding powerhouse that has got rivals worried.

The deal involves the Japanese companies renting Yangzijiang’s Taicang Shipyard for 20 years from next April.

The facility, which has been used mainly for building offshore structures and outfitting, does not have a dry dock but Mitsui E&S confirmed that the partners plan to build one.