Overseas sales of those three products — identified by Beijing as vital for future economic growth — surged above USD 150 billion last year, an increase of more than one-fifth, according to a new report from Australia’s Griffith Asia Institute. While the dollar numbers are down in 2024, that’s largely due to sliding prices rather than a drop in shipments, according to Bloomberg analysis of Chinese trade data.
All these numbers show why China’s factory capacity has quickly become the key faultline in a polarizing global economy. Beijing says its booming industries will help meet both domestic and overseas demand, helping the world transition toward cleaner energy at an affordable cost. The US and Europe, which want to develop their own capacity, say Chinese over-production is unfairly undercutting competitors.
“Chinese dominance in these three sectors is unlikely to be challenged,” Jing Zhang and Christoph Nedopil wrote in the Griffith report, citing the country’s well-integrated value chains, rapid innovation and government support for the industries among the reasons. They added that rising trade tensions may affect trade flows, and push some Chinese producers of the goods to invest overseas.
Lithium-Ion Batteries
China’s battery exports have soared as global use of electric cars picked up. The USD 65 billion dollars worth of shipments last year was almost 28% higher than in 2022, with the US, Germany and South Korea the largest markets, according to the Griffith report.Some of that may have been driven by stockpiling, it said, noting that the US started tightening rules to exclude batteries from China. The change may already be having an impact, with battery exports to the US and South Korea dropping in dollar terms in the first quarter, though lower prices could also be part of the reason.
Solar Panels
China’s world beating solar equipment makers have taken over much of the global market by driving down costs and pushing competitors out of business. However those low prices are now coming back to hurt them, with Longi Green Energy Technology Co., one of the world’s biggest solar manufacturers, this week reporting a first-quarter loss.Companies are manufacturing close to, or even below, their production costs. Many have been forced to lay off staff and cancel new plants to survive an industry consolidation that Longi President Li Zhenguo last year predicted would take out more than half of firms in the sector.
Despite all those losses, in 2023 companies still exported a third more solar power equipment than in 2022, according to the Griffith University report.
Electric Vehicles
Chinese firms like BYD Co. and Nio Inc. produced about 10 million EVs last year, which was almost 70% of global production, according to the Griffith report. More than 1.5 million were exported, a 64% increase in a single year, Chinese official data show.Europe was the most important market for China’s EV makers, but the sudden spurt in exports has shocked governments and companies in the region — prompting the European Union to open an investigation into Chinese subsidies that will likely lead to tariffs being imposed this year.
Thailand was the second-largest export destination by number of cars, the official data shows. Chinese companies like Chery Automobile Co. are building factories there, posing a growing threat to Japanese auto firms that have long dominated the market.
But Chinese carmakers, like their counterparts in the solar industry, are caught up in a fierce price war and struggling with low profitability. Market leader BYD reported Monday that first-quarter revenue grew at the slowest pace in four years, even as exports jumped more than 150%.
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