The outlook for the Chinese yacht industry is one of mixed optimism and concern.

In response to the growth of the Chinese market, the big European boat builders, such as Sunseeker International Ltd and Princess Yachts International Plc, have established operations in the country, where they see greater opportunities than in their home markets which are plagued by economic uncertainty.

China's yacht industry was worth 4.15 billion yuan ($665 million) by the end of last year and 2.1 billion yuan came from sale of luxury vessels worth at least 2 million yuan, according to the 2014 Yacht Report released by the Fortune Character Research Center, an industry information provider.

In 2013, the combined value of imported yachts rose 14 percent year-on-year, accompanied by a 31 percent increase in volume.

Starting in 2014, the growth rate of China's yacht industry is predicted to be 30 percent, while the market value is expected to exceed 15 billion yuan in the next five years.

However, the industry is very much dependent on the export of finished boats and also parts. As the China Cruise & Yacht Industry Association has discovered, the country imported about 180,000 yachts between 2011 and 2012, at a cost of $360 million, a reduction from 2012-13 when 290,000 yachts were imported at a total value of $586 million.

Zhangzhou Yihong Yacht Industrial Co Ltd builds SeaStella luxury yachts as an original equipment manufacturer, which means they import the parts and then assemble the boats in China.

The Hunan-based, Shenzhen-listed Sunbird Yacht Co Ltd, China's first and now only company with its own research and development center, has set up design centers in the United States and Italy, and is hoping to attract world-class designers to work for it.

In 2011, Shanghai Bestway Marine Engineering Design Co first entered the yacht industry. In 2013, the company, which also builds ships and works on marine projects, sold its first yacht, making a profit of 6.2 million yuan.

That success is largely attributed to Shanghai Bestway's 2010 joint venture with the Italian yacht group FIPA (Foundation for Intelligent Physical Agents). The JV allowed the Chinese company to gain access to FIPA's technology and the position of sole agent in China for FIPA's Maiora range.

Some foreign yacht makers have tried to gain deeper market penetration by focusing on specialized sectors.

For example, take the five companies led by the business organization New Zealand Trade and Enterprise - Fusion Electronics, Hella Marine, Marinco BEP Products, Navico and Vetus Maxwell.

Rather than simply build boats, these companies specialize in the production of electrical marine devices, electronics, entertainment systems and lighting. Few Chinese companies have paid much attention to this niche market, and even some of the Chinese Navy's maritime patrol boats depend on the propulsion units made by New Zealand's HamiltonJet.

Because Volvo Penta only manufactures marine products in Sweden and France, Giorgio Paris, the company's president of regional emerging markets and the Asia-Pacific, said it will take time for Chinese brands to catch up with their Western counterparts.

"There is a sort of learning curve for everybody, including Chinese manufacturers. It's a matter of time," he said.

"Chinese manufacturers are closing the gap, so we will see them more and more. It's in the Chinese DNA to learn very quickly. They are constantly improving," he said.

Stefan Carlsson, president of Volvo Penta Europe, said: "This is related to the Chinese buying habit. Sometimes when people buy certain luxury items, they really want the key brands. Rather than taking it as a comment on the competence of Chinese manufacturers, it's more about brand positioning."

shijing@chinadaily.com.cn