Hu Keyi, technical director of Jiangnan Shipyard (Group) Co Ltd. [Photo provided to China Daily]

"China has excess capacity in building conventional ships, but not in complex and high value-added ships," Hu said. "Adjusting production structure should be the key. The government should encourage domestic companies to develop vessels in areas such as security, science and research and engineering," Hu said in his proposal to the annual session.

Hu said Jiangnan Shipyard has "very healthy cash flow" due to its advantage in building high-end and special-purpose vessels, including liquefied gas tankers.

Dong Liwan, a shipping industry professor at Shanghai Maritime University, agreed.

Capable Chinese shipyards are now focusing on vessels with a higher value, such as liquefied natural gas and liquefied petroleum gas carriers. Some have also begun to develop new sectors, including marine fishing ships and law enforcement vessels, Dong said.