Electrical Equipment / Components & Telecoms

This year marks the 20th anniversary of China’s accession to the World Trade Organization. Since China’s accession to the WTO, China’s electromechanical industry has rapidly integrated into the global industrial chain, and its trade scale has expanded rapidly. It has become "half of China’s total trade in goods," of which exports accounted for nearly 60%. The pulling effect is obvious.

In 2020, despite the repeated global epidemics and the shrinking foreign trade of various countries, China's export of mechanical and electrical products achieved a bucking growth of 5.7%, which drove China's export of goods to increase by 3.3% that year, and continued to play an important role as a stabilizer of foreign trade.

Since the beginning of this year, China's mechanical and electrical foreign trade has continued to grow rapidly. Since July last year, mechanical and electrical exports have achieved double-digit growth for 14 consecutive months. The monthly increase in exports has been higher than the historical average for the same period by 30 billion U.S. dollars for 10 consecutive months. Among them, the segmented products that accounted for more than 90% of the export value increased year-on-year, and the increase in the export value to key markets such as Europe, America, Japan, South Korea, and ASEAN generally exceeded 30%, which promoted China's mechanical and electrical product exports to break through the growth rate of the past four "five-year plans". The bottleneck of the decline and the outbreak of the epidemic entered a new "platform period" on the total scale, and the "14th Five-Year" mechanical and electrical foreign trade volume increased and improved the station to a new starting point.

The mechanical and electrical foreign trade maintains a high boom, and the trade value continues to grow at a high rate

Under the influence of the epidemic, the transformation of residents’ living and office styles has increased the long-term demand for digital communication equipment such as laptops, tablets, servers, and household appliances, fitness and rehabilitation equipment, power tools and other home products, superimposing the stability of China’s electromechanical industry production. Nature, ensuring the continuous growth of mechanical and electrical exports. From January to August 2021, China’s exports of mechanical and electrical products totaled US$1.23 trillion, a significant year-on-year increase of 34.4% and an increase of 32.5% over 2019. The two-year average growth rate was about 15%, accounting for 58.8% of China’s total exports of goods over the same period. Full of resilience.

At the same time, the recovery of domestic and foreign production capacity has promoted the growth of China's imports of intermediate products such as integrated circuits, computer parts and accessories, and auto parts, supporting the good performance of China's mechanical and electrical imports. In the first eight months, cumulative imports were 734.02 billion U.S. dollars, a year-on-year increase of 27.5% and an increase of 26% over 2019. The two-year average growth rate was approximately 12.3%. Cumulative imports accounted for 42.4% of China’s total imports of goods over the same period. As of August, China's monthly imports of mechanical and electrical products have achieved double-digit growth for 12 consecutive months, and for the first time in six consecutive months, imports have exceeded US$90 billion.

Exports to key markets have generally increased, and market diversification has accelerated

From January to August, China’s exports of mechanical and electrical products to all major markets have increased significantly. Among them, exports to the "Belt and Road" increased by 31.5% year-on-year, accounting for 27.8% of China’s total exports of mechanical and electrical products; exports to RCEP countries increased by 26.7 %, accounting for 23.6%; exports to the EU increased by 40.7%, accounting for 16.6%; exports to ASEAN increased by 27.9%, accounting for 12.8%. In terms of specific countries (regions), the United States, Hong Kong, Japan, South Korea, and Vietnam are the top five markets for the mainland's electromechanical exports, and the total export value accounts for 44.4% of the total electromechanical exports.

Although the 301 tariff is still maintained, the United States is still the largest single market for China's exports of mechanical and electrical products, and its exports of mechanical and electrical products have shown double-digit growth for 14 consecutive months. Among them, the export of tablet computers, lighting products, containers, sports fitness equipment, electric toys, video game consoles, lithium batteries and other products increased significantly. Laptops and mobile phones without tariffs are the top two products exported to the United States, accounting for 21% of the total export value of electromechanical products to the United States during the same period.

In terms of imports, Japan, South Korea, and Taiwan are the main sources of imports of key components and equipment from the mainland, and the total amount of imports accounted for 43.8% of the total imports of electromechanics. In the first eight months, the mainland’s total import share of integrated circuits from Taiwan and South Korea was 55.8%; the total import share of LCD panels from Taiwan, Japan, and South Korea was 81.9% (of which Taiwan’s share was 49.9%); and the total import share from Japan and South Korea’s semiconductor equipment The import share is 45.7%.

The annual export growth rate or about 20%, the increase in volume and quality is the goal

In the case of repeated global epidemics, China's mechanical and electrical foreign trade is still in an important window period, and global demand in key industries is expected to generally increase, supporting the relatively high level of prosperity in China’s mechanical and electrical enterprises’ production and exports. High growth rate and the highest level in history, about 20% of the export volume growth rate will also be the highest in the past ten years.

However, the supply chain tension and supply delays or even interruptions caused by the epidemic still have uncertain effects on foreign-funded enterprises and China's mechanical and electrical foreign trade, which still accounts for a relatively high proportion of processing trade. At the same time, due to the pressure of international freight, skyrocketing raw material prices, chip shortages, exchange rate fluctuations, complex and severe external environments and domestic power cuts, short-term fluctuations in imports and exports may be inevitable. In the medium and long term, countries are paying more attention to the physical manufacturing industry, and the safety of the industrial chain has received more extensive attention. The regionalization and short-chainization of the global electromechanical industry chain value chain are intensifying, which will still pose pressure on the global industrial restructuring in the post-epidemic period.

In general, China's mechanical and electrical foreign trade is in a new stage of development with both scale and quality, technology, quality, brand, service and other comprehensive improvements in quality and efficiency. In the construction of a new domestic and international dual-cycle development pattern, it will take a higher level and more High-level integration into the international division of labor system and global value chain.

The prosperity of key industries is relatively high, and the export of most products has increased significantly

From January to August, the export growth rate of China's key mechanical and electrical industries generally exceeded 30%, and the import growth rate exceeded 20%. From the perspective of commodity distribution, segmented products that account for more than 90% of their exports have achieved year-on-year growth.

For the mobile phone with the highest export value, the export value and export volume in the first eight months increased by 18.5% and 3.9% year-on-year respectively. However, due to the slowdown in global demand and the high base in the same period last year, the export volume has fallen for 4 consecutive months. The rise in the export volume supported the export volume, and the negative monthly export volume growth began in July. The export value of automatic data processing equipment and its parts and components increased by 22.4% year-on-year, and the growth was steady. Among them, notebook computers have been the mainstream product, and the export volume has been increasing for 14 consecutive months. The epidemic-driven demand is reversing the continuous shrinking trend of the computer industry for many years. The automobile industry's production capacity and demand continued to recover, and the overall production and operation activities of the company continued to expand. The export volume and export value of complete vehicles increased by 117.5% and 129.1% year-on-year respectively, making it the fastest-growing key electromechanical product in China. Among them, the export volume and export value of electric passenger vehicles increased by 163.7% and 214.6% respectively year-on-year, which was higher than the overall growth rate of the industry. Household appliances increased by 33.2% year-on-year. However, due to the high base in the second half of last year and the backlog of goods caused by shipping pressure, the growth rate of China's household appliance exports has narrowed for four consecutive months. The export volume of air conditioners, refrigerators and washing machines as mainstream products has been Generally, there has been a negative growth since July.

In terms of imports, the integrated circuit with the highest import value has maintained an active trade trend since the second half of 2019. Imports increased by 26.4% year-on-year to US$271.24 billion, maintaining the position of the single largest commodity with the largest import value with a share of 37%. At the same time, the export volume of integrated circuits increased by 32.4%, achieving positive growth for 32 consecutive months. The trade deficit reached US$177.15 billion, an increase of 23.4% year-on-year.