MNI INTERVIEW: China Green Exports To Maintain Strong Growth
China's green exports will maintain positive growth for years to come, a industrial policy advisor has told MNI.
Cost competitiveness and strong global demand will continue to drive growth among China’s green-technology exports, while trade tensions will accelerate the sector’s continued globalisation, a Chinese industrial policy advisor has told MNI.
The export growth rate of electric vehicles, batteries and solar panels will slow slightly in 2024 from last year’s rapid 30% y/y gain – against an overall 0.6% export increase – but will maintain strong momentum for years to come, said Chen Chen, director at the China Machinery Industry Information Research Institute.
Domestic firms' cost advantage alongside strong technology, manufacturing and services capabilities will support overseas sales, Chen told MNI in an interview, noting global demand had added to sales strength.
The International Energy Agency (IEA) expects EV battery production to increase to 3500GWh by 2030 from 340GWh in 2022, with solar energy capacity rising 400%, while EV stock will grow from less than 45 million in 2023 to 525 million by 2035 globally.
China’s export growth will remain strong in H2 despite the widening gap between official and private PMI results, economists have told MNI. (See MNI: China Exports Strong In H2, Despite Diverging PMIs)
TRADE TENSIONS
Recent EU and U.S. measures against China’s green exports will not significantly impact shipments, Chen added, noting overseas sales since tensions began in 2017 had been largely unaffected, a trend unlikely to reverse.
“Protectionism causes short-term disruption, but market principles always favour high-quality, low-cost manufacturing for which China holds comparative advantages,” Chen continued.
Chen stressed policy was not simply about exports, but aimed to establish global value-chain partnerships. China remained open to cooperation with the EU and U.S., the largest markets with the best technology, he added.
“Look at how Tesla developed under Sino-U.S. cooperation – these new industries require deep value partnering in finance, engineering, product support and technological innovation, there is huge potential,” Chen noted. “Recent western measures may accelerate domestic firms moving production abroad, but economic principles would have demanded this anyway.”
China still hopes to negotiate a deal with the EU to reduce, or drop hefty new tariffs on Chinese electric vehicles, possibly based on promises to restrict pricing and export volumes. (See MNI: China Hopes For Deal With EU On EV Tariffs - Advisors)