China’s car shipments to overseas markets have increased fivefold over the past four years. Chinese solar panels dominate the global market. Even exports are soaring in labor-intensive industries such as furniture manufacturing, an area where China was once thought to lose out to low-wage countries.
American and European leaders have become increasingly vocal about the flood of Chinese exports that is swamping their markets. Developing countries such as India and Brazil have joined in limiting purchases from China. Rich and poor countries alike worry that many of their own factories may need to close because they can’t compete with China’s newer, more automated factories.
But China’s manufacturing sector is so strong that its export push will be hard to resist. China already has more robots installed in its factories than the rest of the world combined. China’s low-cost supply chain makes nearly every conceivable component. Xi Jinping, the country’s top leader, is pushing the country’s banks to provide more loans for more factories.
Meanwhile, Chinese companies are finding ways to get around Western trade barriers. They’re breaking up shipments into small packages, each of which is low enough in value to be exempt from tariffs. Chinese companies have increased exports to the West via indirect routes through Southeast Asia and Mexico, sidestepping tariffs on goods coming directly from China.
What are China’s main exports?
Among China’s exports, no category gets more attention than cars. In just four years, China has grown from a laggard to the world’s largest auto exporter, shipping nearly 5 million vehicles last year.
China’s electric vehicle exports get the most attention, but three-quarters of those exports are gas-powered cars. As electric vehicles eat into China’s market share, automakers are shipping excess gas-powered cars to markets like Russia and Mexico, where Chinese cars account for more than half the market.
To get its excess cars to far-flung markets, China has begun building its own fleet of 170 ocean-going car carriers capable of carrying a few thousand vehicles at a time. Before the coronavirus pandemic hit in 2019, shipyards around the world were delivering just four such ships a year.
Shipbuilding itself has become a big Chinese export, with shipments more than doubling in the first three months of this year from the same period last year. On Wednesday, the United States began investigating whether China is using unfair trade practices to expand its shipbuilding industry.
Solar panels and their key component, solar wafers, are among China’s fastest-growing exports by volume. Last year, China’s wafer exports nearly doubled. But the value of China’s solar exports actually fell slightly last year as prices for solar products nearly halved.
The European Union has launched an investigation that could lead to restrictions on Chinese solar exports. The United States has also been considering stricter rules on solar imports.
A port in China. Chinese companies have dodged tariffs and increased exports through Southeast Asia and Mexico.
Why is China pushing exports so hard?
China is trying to export its way out of a real estate crisis. Apartment building construction was once the engine of China’s economy. But the collapse of a decades-long real estate bubble has caused apartment prices to plummet, leading to a sharp slowdown in the construction industry. Dozens of real estate developers have run out of money.
Beijing hopes that strong sales of manufactured goods overseas, and heavy investment in the factories that make those products, will help offset the collapse of China’s real estate market. Early signs suggest that Beijing’s bet is paying off.
China’s economy grew at an annualized rate of 6.6% in the first three months of this year, higher than expected. Manufacturing investment and exports led the growth.
How much help is the Chinese government giving its manufacturers?
China’s state-owned banks are pouring money into the manufacturing sector. Low-interest loans mean companies can afford to build factories full of robots and spend heavily on research and development.
Lending to industry has grown sharply every year. It was $83 billion in 2019. By last year, annual growth in industrial lending had soared to $670 billion.
China’s big cities are also competing to help local manufacturers. Shenzhen is helping electric-car makers like BYD get export insurance, buy ships and build overseas research and development centers.
China produces nearly a third of the world’s manufactured goods, more than the United States, Japan, Germany, South Korea and the United Kingdom combined, according to the United Nations Industrial Development Organization.
China’s economy grew at an annualized rate of 6.6% in the first three months of this year, faster than expected.
Can China overcome trade barriers?
European leaders in Brussels recently took initial steps to impose trade restrictions on Chinese goods. In addition to solar products, they are also focusing on electric vehicles, wind turbines and medical equipment.
The Biden administration is also following up on the Trump administration’s trade actions. On Wednesday, President Biden called for sharply higher tariffs on Chinese steel and aluminum.
But Beijing and Chinese companies have learned from President Trump’s tariffs on nearly half of China’s exports to the United States in recent years. China’s precautions could make its exports hard to stop.
In recent years, China has signed 21 free-trade agreements with 29 countries and regions. Many of those countries, such as Vietnam and Thailand, are also sought by Western countries as they encourage global manufacturing to move away from China.
Thanks to its trade deals, China sells more parts and components to those countries, which are assembled into goods shipped to the West. Its exports to Southeast Asia have grown 75% over the past four years, according to China’s General Administration of Customs.
Chinese companies like Shein have also become adept at sending packages directly to American homes, thus avoiding tariffs. The United States allows residents to buy up to $800 worth of goods from overseas each day without paying tariffs, which is equivalent to nearly $300,000 worth of goods per person per year.
Republican Senator Bill Cassidy of Louisiana has begun pushing legislation to adjust the U.S. tariff-free import limit to the same level as China’s, which is $6.5.
China’s car shipments to overseas markets have increased fivefold over the past four years. Chinese solar panels dominate the global market. Even exports are soaring in labor-intensive industries such as furniture manufacturing, an area where China was once thought to lose out to low-wage countries.
American and European leaders have become increasingly vocal about the flood of Chinese exports that is swamping their markets. Developing countries such as India and Brazil have joined in limiting purchases from China. Rich and poor countries alike worry that many of their own factories may need to close because they can’t compete with China’s newer, more automated factories.
But China’s manufacturing sector is so strong that its export push will be hard to resist. China already has more robots installed in its factories than the rest of the world combined. China’s low-cost supply chain makes nearly every conceivable component. Xi Jinping, the country’s top leader, is pushing the country’s banks to provide more loans for more factories.
Meanwhile, Chinese companies are finding ways to get around Western trade barriers. They’re breaking up shipments into small packages, each of which is low enough in value to be exempt from tariffs. Chinese companies have increased exports to the West via indirect routes through Southeast Asia and Mexico, sidestepping tariffs on goods coming directly from China.
What are China’s main exports?
Among China’s exports, no category gets more attention than cars. In just four years, China has grown from a laggard to the world’s largest auto exporter, shipping nearly 5 million vehicles last year.
China’s electric vehicle exports get the most attention, but three-quarters of those exports are gas-powered cars. As electric vehicles eat into China’s market share, automakers are shipping excess gas-powered cars to markets like Russia and Mexico, where Chinese cars account for more than half the market.
To get its excess cars to far-flung markets, China has begun building its own fleet of 170 ocean-going car carriers capable of carrying a few thousand vehicles at a time. Before the coronavirus pandemic hit in 2019, shipyards around the world were delivering just four such ships a year.
Shipbuilding itself has become a big Chinese export, with shipments more than doubling in the first three months of this year from the same period last year. On Wednesday, the United States began investigating whether China is using unfair trade practices to expand its shipbuilding industry.
Solar panels and their key component, solar wafers, are among China’s fastest-growing exports by volume. Last year, China’s wafer exports nearly doubled. But the value of China’s solar exports actually fell slightly last year as prices for solar products nearly halved.
The European Union has launched an investigation that could lead to restrictions on Chinese solar exports. The United States has also been considering stricter rules on solar imports.
A port in China. Chinese companies have dodged tariffs and increased exports through Southeast Asia and Mexico.
Why is China pushing exports so hard?
China is trying to export its way out of a real estate crisis. Apartment building construction was once the engine of China’s economy. But the collapse of a decades-long real estate bubble has caused apartment prices to plummet, leading to a sharp slowdown in the construction industry. Dozens of real estate developers have run out of money.
Beijing hopes that strong sales of manufactured goods overseas, and heavy investment in the factories that make those products, will help offset the collapse of China’s real estate market. Early signs suggest that Beijing’s bet is paying off.
China’s economy grew at an annualized rate of 6.6% in the first three months of this year, higher than expected. Manufacturing investment and exports led the growth.
How much help is the Chinese government giving its manufacturers?
China’s state-owned banks are pouring money into the manufacturing sector. Low-interest loans mean companies can afford to build factories full of robots and spend heavily on research and development.
Lending to industry has grown sharply every year. It was $83 billion in 2019. By last year, annual growth in industrial lending had soared to $670 billion.
China’s big cities are also competing to help local manufacturers. Shenzhen is helping electric-car makers like BYD get export insurance, buy ships and build overseas research and development centers.
China produces nearly a third of the world’s manufactured goods, more than the United States, Japan, Germany, South Korea and the United Kingdom combined, according to the United Nations Industrial Development Organization.
China’s economy grew at an annualized rate of 6.6% in the first three months of this year, faster than expected.
Can China overcome trade barriers?
European leaders in Brussels recently took initial steps to impose trade restrictions on Chinese goods. In addition to solar products, they are also focusing on electric vehicles, wind turbines and medical equipment.
The Biden administration is also following up on the Trump administration’s trade actions. On Wednesday, President Biden called for sharply higher tariffs on Chinese steel and aluminum.
But Beijing and Chinese companies have learned from President Trump’s tariffs on nearly half of China’s exports to the United States in recent years. China’s precautions could make its exports hard to stop.
In recent years, China has signed 21 free-trade agreements with 29 countries and regions. Many of those countries, such as Vietnam and Thailand, are also sought by Western countries as they encourage global manufacturing to move away from China.
Thanks to its trade deals, China sells more parts and components to those countries, which are assembled into goods shipped to the West. Its exports to Southeast Asia have grown 75% over the past four years, according to China’s General Administration of Customs.
Chinese companies like Shein have also become adept at sending packages directly to American homes, thus avoiding tariffs. The United States allows residents to buy up to $800 worth of goods from overseas each day without paying tariffs, which is equivalent to nearly $300,000 worth of goods per person per year.
Republican Senator Bill Cassidy of Louisiana has begun pushing legislation to adjust the U.S. tariff-free import limit to the same level as China’s, which is $6.5.
