According to 'China Daily' Zhejiang Jingang Shipbuilding Co Ltd, headquartered in the Taizhou city of East China's Zhejiang province, recently filed a bankruptcy petition to the Taizhou Municipal Intermediate People's Court due to its significant loans and lack of new orders.
Most banks regard the export-led shipbuilding industry as "high risk", refusing to underwrite or extend loans to related companies.
The Jingang shipyard is only one among many similar Zhejiang-based shipyards that have suspended business and dismissed employees due to the difficult market conditions.
In June, Ningbo Hengfu Shipping Trade (Group) Co Ltd and Ningbo Beilun Sky Shipbuilding Co Ltd both filed motions to sell off assets.
Industry losses are widespread, as the volume of new orders in 2011 fell 52 percent, according to the China Association of the National Shipbuilding Industry.
New orders totaled 9.45 million deadweight tons, a drop of 47.3 percent from a year earlier. Combined outstanding orders were 134.4 million deadweight tons, down 10.4 percent from the end of 2011.