CSSC General Manager Chen Xiaojin said the new shipyard would be built on Changxing Island, off Shanghai and would need an investment of around 20 to 30 billion yuan ($US2.4 to $3.6 billion), and should take eight to ten years to complete.

The new shipyard will quadruple Shanghai's shipbuilding capacity from the current three million tons to 12 million tons in 2015.

Hyundai Heavy Industries currently operates the world's biggest shipyard, Hyundai Shipyard, in the city of Ulsan in South Korea, which is the top ship producer, followed by Japan. China is the third biggest, with about 8 per cent of global market share.

The new yard is being built by the China State Shipbuilding Corp, which incorporates 25 big and medium-size shipyards. The group now produces tankers and container ships, as well as warships and submarines for China's navy.

The increased shipbuilding capacity in 2015, is expected to create up to 700,000 job opportunities through the flow of work down through various industries