Electrical Equipment / Components & Telecoms

A few days ago, Chinese new energy power battery enterprise Ningde Times and American centennial automobile enterprise Ford announced at the same time that they would jointly build a new power battery factory in Michigan, the United States, to produce lithium iron phosphate battery, with an investment of up to 3.5 billion dollars in the new factory. Ford CEO Jim Farley said, "The batteries in the new factory will be one of the lowest production costs, which will lower the pricing of electric vehicles and increase the profits of automakers

This is another major achievement for China's lithium-ion batteries to move from local to global markets.

In recent years, lithium batteries have become a new growth point for China's international trade exports. According to the statistics of the General Administration of Customs of China, the export volume of lithium-ion batteries in China in 2022 reached nearly 342.656 billion yuan, an increase of 86.7% year-on-year, reaching a new historical high.

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

Gao Shiwang stated that last year, China's mechanical and electrical foreign trade withstood multiple pressures such as weak external demand, poor supply, capacity transfer, and trade frictions. The export scale and trade surplus both reached annual highs, with emerging industries performing particularly well, and the industry's foreign trade volume stabilizing and improving in quality.

According to statistics from the General Administration of Customs, in 2022, China's international trade exports of 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 and reaching a new high for three consecutive years; The import volume decreased by 8.2% year-on-year to 1045.85 billion US dollars; The trade surplus has exceeded $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, "said Gao Shiwang. For example, the decrease in sea freight and raw material prices has alleviated the cost pressure on enterprises, and the profit situation of enterprises has improved. However, insufficient orders have become the main problem faced by enterprises at this stage. In January 2023, the National Bureau of Statistics released a new export order index of 46.1%, which is lower than the overall level of 50.9% of the new order index, indicating insufficient external demand driving force. In October 2022, a survey conducted by the China Chamber of Commerce for International Trade of Mechanical and Electrical Products on 500 mechanical and electrical foreign trade enterprises also showed that more than half of the enterprises reported a decrease in their orders compared to the same period last year.

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

Electronic information products, which account for nearly 30% of mechanical and electrical exports, will continue to experience a downward trend in export volume due to weak international demand, and the growth momentum of mechanical and electrical exports will slow down. "Gao Shiwang said that China's mechanical and electrical industry is generally in a stage of benign development in terms of production capacity, technology, brand, and operation. Industries such as new energy vehicles, photovoltaic, and lithium batteries are in line with international standards or even leading, and the future demand of emerging industries will be further released, This constitutes an important support for the growth of mechanical and electrical exports. In the medium to long term, with a large base, mechanical and electrical exports will return to slow growth.

"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 supply capacity in emerging economies, the number of trade remedy investigations initiated by emerging markets against China has gradually increased. Gao Shiwang suggests increasing efforts to support the development of emerging industries, encouraging enterprises to build their own brands, while continuing to attract foreign investment in China, supporting enterprises to participate in overseas exhibitions and conduct international trade market inspections, providing more convenience for cross-border business exchanges of international trade enterprises, and actively playing the platform role of the Import and Export Chamber of Commerce.