Electrical Equipment / Components & Telecoms

In recent years, electric passenger cars, lithium batteries, solar cells and other commodities have become increasingly important in China's foreign trade as the "new three types" of exports. On June 18th, the General Administration of Customs released a monthly import and export report. Customs data showed that in the first five months of this year, the cumulative export amounts of electric passenger vehicles, lithium-ion batteries, and solar cells in China reached 113.942 billion yuan, 183.613 billion yuan, and 152.189 billion yuan, respectively, an increase of 172.4%, 78.5%, and 23.6% compared to the same period last year.

The popularity of the 'new three types' overseas has had a profound impact on China's export and domestic economic patterns. "Hong Yong, a think tank expert at the China Digital Real Integration 50 Forum, said in an interview with Securities Daily. On the one hand, this indicates that China's product quality is constantly improving, technological content is gradually improving, and innovation capabilities are significantly enhanced, which is a manifestation of the continuous optimization of the export pattern; On the other hand, it will encourage domestic enterprises to actively expand into the international market, continuously enhance market competitiveness and advantages, and further promote China's position in the global value chain to leap from the middle and back ends to the front end.

The "New Three Kinds" continue to be popular

Becoming a new driving force for exports

Customs data shows that in recent years, electric passenger cars, lithium batteries, and solar cells have gradually replaced clothing, furniture, and household appliances in China's foreign trade, becoming new hot selling export products, and continuously improving the driving force for China's overall export growth. According to customs data, the "new three types" in 2022 drove China's overall export growth by 1.7 percentage points, and the driving effect has further increased since the beginning of this year.

According to the monthly report data released by the General Administration of Customs on June 18th, the export volume of electric passenger vehicles, lithium-ion batteries, and solar cells in China reached 156718 vehicles, 305.82 million vehicles, and 477.86 million vehicles in May, with year-on-year growth of 107.3%, -7.2%, and 39.4%, respectively. Although the export quantity of lithium-ion batteries has decreased, the amount of related products has shown a significant growth trend. Customs data shows that in May, the export value of lithium-ion battery products reached RMB 37654.42 million, a year-on-year increase of 51.6%.

Experts interviewed by Securities Daily all stated that the emergence of the "new three types" of foreign trade is closely related to China's continuous promotion of technological innovation to promote industrial structure optimization and upgrading. The transformation and upgrading of the manufacturing industry has helped relevant fields form scale advantages and become a new export energy.

From the perspective of electric passenger cars, Wang Peng, a researcher at the Beijing Academy of Social Sciences, told Securities Daily that currently, China has formed a certain scale advantage in this field, which enables it to occupy a favorable position in international market competition. Specifically, firstly, China's basic research and development in the field of electric manned vehicles is relatively solid, and components and core technologies, including on-board batteries, operating systems, etc., can be independently controlled; Secondly, thanks to the production cost advantage, China's electric passenger vehicles have absolute price competitiveness globally. In addition, due to considerations such as low-carbon and environmental protection, China has provided significant policy support for the field of electric passenger vehicles, creating favorable space for its development and further strengthening its international competitiveness.

Customs data shows that from the perspective of lithium-ion batteries, the proportion of the total export value of lithium-ion batteries to China's total export value is increasing year by year, from less than 0.7% in 2020 to nearly 1% in 2021, and rapidly increasing to nearly 1.5% in 2022. In response, Shi Jiayan, an energy storage analyst at Bloomberg New Energy Finance, explained to Securities Daily that overseas demand for lithium-ion batteries continues to rise rapidly due to the impact of car electrification and energy transformation needs. However, high demand cannot be met by domestic battery manufacturing capacity, and China has the vast majority of battery manufacturing capacity in the world. Therefore, China's lithium-ion battery exports continue to grow.

From the perspective of solar cells, Tan Youru, an energy storage analyst at Bloomberg New Energy Finance, believes that due to the good economic performance of photovoltaic power generation, as well as the stimulation of energy security issues and accelerated development of renewable energy policies, the overall demand for photovoltaic modules in overseas markets is strong. However, considering the long construction cycle, production economy, and policy implementation and certainty, importing relevant components from China is a better choice.

New Three Kinds of Enterprises

Pay attention to quality improvement

Looking forward to the future, from the demand side, with the further deepening of international recognition for energy conservation, environmental protection, sustainable development, and intelligence, the demand for electric manned vehicles, lithium batteries, and solar cells has formed sustained support; From the supply side perspective, in the process of continuous transformation and upgrading of the domestic manufacturing industry, the international competitive advantage of related products will continue to be consolidated. In this context, the "new three types" will continue to be popular and become an important part of China's export trade.

Hong Yong believes that with the increasing demand for energy conservation and environmental protection, as well as the support of national policies, China's "new three types" export scale will continue to expand. But with the intensification of international market competition, the allocation of market share will become even more brutal, which puts forward higher requirements for domestic enterprises in terms of technological improvement, cost reduction, and market expansion.

Taking lithium-ion battery industry enterprises as an example, Shi Jiayan stated that for lithium-ion battery manufacturing and its upstream and downstream enterprises, it is currently a good time to enter overseas markets, especially for overseas factory construction and production expansion. Opportunities for going abroad outweigh challenges.

For this reason, Wang Peng suggests that as more and more enterprises enter the "new three types" related fields, they should avoid price wars within the industry and narrow their profit margins; Relevant enterprises should constantly rely on innovation to create a technological "Moat", break through technological bottlenecks and consolidate international competitiveness. In addition, while pursuing growth in quantity, relevant enterprises should also focus on improving quality. In addition to continuing to focus on the export of related products, they can also further enhance China's position in the international industrial chain by exporting related product designs, services, technology, etc. (Transferred from: Securities Daily)