Thursday, November 14, 2024

China’s EVs could accelerate recovery – but trade restrictions threaten to stall growth at the starting line

Must read


Analysts say potential U.S. restrictions on China’s electric vehicle (EV) imports, a potential platform for growth in the coming years as the electric vehicle (EV) industry develops, could help the economic recovery regain momentum. This could be a further blow to the Chinese government’s efforts to do so.

U.S. Commerce Secretary Gina Raimondo said Tuesday that Chinese EVs could pose a risk because they collect “vast amounts of information about drivers.”

The remarks came as President Joe Biden’s administration is considering toughening import duties on some Chinese products, including electric vehicles. Tariffs are currently set at 25%, a byproduct of tariffs imposed during the tenure of his predecessor, President Donald Trump, and the current “narrow garden with high fences.” strategy This is to limit access to Chinese high-tech products.

01:11

China’s BYD overtakes Tesla to become world’s largest EV maker

China’s BYD overtakes Tesla to become world’s largest EV maker

“if [the industry is] unable to regularly export products overseas; [it] This will further worsen China’s current deflationary environment. [and] “Household and business sentiment towards economic recovery weakens,” said Dong Jinyue, senior economist at BBVA Research.

Dong said the EV issue has escalated into a national security issue for the United States, which will reignite geopolitical tensions and create further uncertainty over China’s growth prospects.

european union October announcement China’s announcement to conduct an anti-subsidy investigation into EVs marks the first major blow to a fundamental sector that has grown rapidly in recent years and has the potential to boost exports and growth in the world’s second-largest economy. became.

Chinese EV maker Geely attracts mainstream buyers with pure electric Galaxy model

China became World’s top car exporter In 2023, increasing demand for EVs will also contribute in no small part. But the sector is already facing pressure from Brussels and Washington, and concerns about overcapacity have been raised domestically.

A major increase in economic activity is welcome at this time to both boost growth and offset the drag on the beleaguered real estate sector that is weighing on the country’s post-pandemic recovery. right.

Sarah Tan, an economist at Moody’s Analytics, said car shipments will increase 69% year-on-year through 2023, reflecting China’s competitive advantage in lithium-ion battery cell production and lower labor costs compared to Japan and South Korea. He said it shows his sexuality.

China is so far ahead in the EV space that further technology regulations from the US are unlikely to have the same impact.

Yan Wang, Counterpoint Research

“Foreign automakers are also setting up factories in China to take advantage of some of these advantages,” she added. “Manufacturers invested an additional 6.5% by 2023, mainly for the automotive, electrical equipment and high-tech electronics industries.

“At a time when authorities are keen to redirect the economy away from real estate, these developments will definitely be a drag,” Mr Tan said.

However, Counterpoint Research senior analyst Yang Wang said companies in the EV value chain need to be cognizant of the regulatory risks associated with entering the US market. He cited trade restrictions imposed on other Chinese companies in recent years.

“Further technical restrictions by the United States are unlikely to have the same impact.” [as they had in] “China is much more advanced in the EV field, especially in battery technology, and we can expect development in areas such as semiconductors and AI,” he said.

Direct competition with the United States is also expected. As the Biden administration pushes ahead with measures to restrict trade in Chinese electric vehicles and semiconductors, it has invested billions of dollars in domestic production of both products.

Heron Lim, assistant director and economist at Moody’s Analytics, said Chinese automakers are lagging behind American and Korean automakers in the U.S. market, with major customers in Asia and Europe.

03:06

Electric buses hit the streets, making China’s public transport greener

Electric buses hit the streets, making China’s public transport greener

“But the concern is whether these U.S. efforts to ban will have a ripple effect of their own,” he added, noting that they are already having an impact. According to some reports Mexico has been urged to be cautious when accepting investment from Chinese manufacturers.

“This could fence off the market and constrain growth in what appears to be China’s next growth frontier.”

Wang Zicheng, a researcher at the Beijing-based think tank China Globalization Center, said the contribution of China’s EVs to the economy is still relatively small and should not be overstated.

“In 2023, China’s total exports will reach 23.77 trillion yuan (3.3 trillion US dollars), and the “three new products” that the Chinese government has heavily promoted – electric cars, lithium batteries, and solar cells – will total 1 trillion yen. “, which accounts for less than 5% of total exports,” he added.

“China’s EVs are certainly leading the world, but their contribution to the Chinese economy…”[should] do not have [be] Exaggerated. The housing industry accounts for a much larger share. ”



Source link

More articles

6 COMMENTS

  1. Hello there, just became aware of your blog through Google, and found that it is really informative.
    I am going to watch out for brussels. I will appreciate if you continue this in future.
    Lots of people will be benefited from your writing. Cheers!

  2. I do accept as true with all of the concepts you’ve introduced in your post.
    They’re really convincing and will definitely
    work. Still, the posts are very quick for starters.

    Could you please lengthen them a little from next time?
    Thank you for the post.

  3. An outstanding share! I have just forwarded this onto a friend who had been doing a little
    research on this. And he in fact ordered
    me lunch due to the fact that I stumbled upon it for him…
    lol. So let me reword this…. Thanks for the meal!!
    But yeah, thanks for spending the time to talk about this matter here on your internet site.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest article