Electrical Equipment / Components & Telecoms

On February 14, Ningde Times, a Chinese new energy power battery company, and Ford, an American century-old automobile company, announced at the same time that the two sides would build a new power battery factory in Michigan, the United States, to cooperate in the production of lithium iron phosphate batteries, with a new factory investment of up to $3.5 billion. Jim Farley, CEO of Ford Motor, said: "The battery in the new factory will be one of the lowest production cost batteries, which will reduce the price of electric vehicles, and the profit of automobile manufacturers will also be higher."

This is another major achievement of China's lithium battery from the local to the world.

In recent years, lithium battery has become a new growth point of China's international trade exports. According to the statistics of the General Administration of Customs of the People's Republic of China, the export volume of lithium ion batteries in China will be close to 342.656 billion yuan in 2022, an increase of 86.7% year on year and a record high.

"The high international energy prices promote the further release of the demand for new energy products. In addition to lithium batteries, China's exports of electric passenger cars and other products have risen, becoming a new growth point to drive the export of mechanical and electrical products." Gao Shiwang, a spokesman for the China Chamber of Commerce for the Import and Export of Mechanical and Electrical Products, said that due to the high base and weak demand, the export of traditional industries fell, and mobile phones, computers, household appliances, machine tools The export volume of mechanical and electrical products such as construction machinery fell year on year for many consecutive months.

Gao Shiwang said that last year, China's mechanical and electrical foreign trade withstood the multiple pressures of weak external demand, poor supply, capacity transfer, trade friction, and so on. The export scale and trade surplus both reached an annual high. The performance of emerging industries was particularly bright, and the foreign trade volume of the industry was stable and qualitative.

According to the statistics of the General Administration of Customs, in 2022, China's export volume of international trade in mechanical and electrical products increased by 3.6% year-on-year to 2052.77 billion US dollars, breaking through 2 trillion US dollars for the first time, reaching a record high for three consecutive years; The import volume decreased by 8.2% year-on-year to 1045.85 billion US dollars; The trade surplus exceeded US $1 trillion for the first time, expanding for six consecutive years.

"At the same time, there are still some problems in the development of the mechanical and electrical industry." Kaoshiwang said, for example, the price of sea freight and raw materials fell, the pressure on enterprise costs eased, and the profit situation of enterprises improved, but the lack of orders became the main problem faced by enterprises at this stage. In January 2023, the new export order index published by the National Bureau of Statistics was 46.1%, which was lower than the overall level of 50.9% of the new order index, indicating that the external demand was insufficient. In October 2022, the survey results of China Chamber of Commerce for Import and Export of International Trade in Mechanical and Electrical Products on 500 mechanical and electrical foreign trade enterprises also showed that more than half of the enterprises said that their orders in hand decreased compared with the same period last year.

At present, the global economic growth is slowing down, the downward pressure on the economy will increase in the future, and the overall consumption demand of all economies will decrease.

"As for electronic information products, which account for nearly 30% of the export volume of electromechanical products, due to weak international demand, the downward trend of export volume in the future will continue, and the growth momentum of electromechanical exports will slow down." Kaoshiwang said that China's electromechanical industry as a whole is in a benign development stage of capacity, technology, brand and operation, and the new energy automobile, photovoltaic, lithium battery and other industries are in line with the international standards or even leading, and the future demand of emerging industries will be further released, This will form an important support for the growth of mechanical and electrical exports. In the medium and long term, the mechanical and electrical exports will return to a low growth rate under a large base.

"Mechanical and electrical enterprises have balanced distribution among regions due to the requirements of importers or actively seeking production capacity." Gao Shiwang said that some enterprises have increased their initiative to transfer to regions close to European and American consumer markets such as Mexico, Vietnam, Türkiye, and low-cost regions such as ASEAN. Multinational companies are also conducting a new round of layout adjustment of production capacity globally in order to seek supply diversification.

With the expansion of China's export scale of mechanical and electrical products and the growth of the supply capacity of emerging economies, the number of trade remedy investigations initiated by emerging markets against China has gradually increased. Kaoshiwang suggested that we should strengthen our efforts to support the development of emerging industries, encourage enterprises to build their own brands, continue to attract foreign investment in China, support enterprises to participate in overseas exhibitions, carry out international trade market research, provide more convenience for cross-border business exchanges of international trade enterprises, and actively play the role of the Chamber of Commerce for Import and Export as a platform.