PHOTO: Carnival could be a partner in a new shipbuilding venture in China, projected to become one of the world's largest crusie markets in a matter of years. (Photo by David Cogswell)

Carnival Corp. took another step toward developing the Chinese cruise market, which shows potential for explosive growth.

Carnival signed a memorandum of understanding with Italian shipbuilder Fincantieri that could lead to building cruise ships at China’s largest shipyard, China State Shipbuilding Corp. (CSSC). Carnival and CSSC last month signed a memorandum to explore a partnership with Fincantieri.

These memorandums of understanding set the stage for a three-company shipbuilding joint venture to build cruise ships in China for the first time.

“This new agreement with Fincantieri gives us the opportunity to work with our long-time partner to further explore a formal joint venture that could forever change the landscape of shipbuilding in China,” said Carnival Corp. CEO Arnold Donald. “After working diligently to get a deep understanding of China’s aggressive cruise ambitions, we’re collaborating with two of the world’s top shipbuilders in Fincantieri and CSSC to establish a framework for a world-class Chinese shipbuilding venture designed to help accelerate growth and demand for cruising in China in the years to come.”

Under the plan, Carnival would use its ship design and construction experience “to create the vision, definition and overall specifications for the China-built cruise ship for the Chinese market,” a company statement said.

As one of the world’s largest shipbuilders, Fincantieri would provide the expertise needed to help CSSC move from building industrial vessels to constructing modern cruise ships.

Carnival Corp.’s agreement with CSSC also says they can explore forming a domestic cruise company, port development, talent development and training as well as supply chain and logistics.

The Chinese Ministry of Transport projects China to be the second-largest global cruise market after the U.S. in the next several years based on economic growth, increased spending power of Chinese consumers and growing demand for cruise vacations. China could see 4.5 million cruise passengers by 2020 and could surpass the U.S. to eventually become the world’s largest cruise market, the Chinese ministry forecasts.

Carnival Corp. already plans to base four cruise ships in China next year — three ships from its Costa brand and one from Princess — that will carry 500,000 passengers. That’s a 140 percent increase over 2013.

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