Allianz Trade (formerly known as Euler Hermes), a global leader in payment insurance and commercial receivables, published his latest study on China, which contains many interesting conclusions.
How do the study see China's economical situation and its position in the global supply chain?
The threat to the improvement of the PRC is seen as a weakening situation in the real property marketplace and in declining abroad investments. Allianz estimates that property improvement last year was 26% lower than before the pandemic. At the same time, abroad investment volumes in China began to decline, thanks to short-term tactical efforts by investors. In the long term, the threat is simply a rapidly ageing and shrinking population and slowing urbanisation.
On the another hand, the Allianz study emphasises that Chinese exports are inactive well, as they stay a key supplier to the world. Although exports will no longer be 1 of the main engines of the mediate State's growth, China's function as a key supplier seems to be unwavering. The number of imports that China is the world's most crucial supplier increases over time among the major global importers. Between 2003 and 2022, the number of critical dependence on China increased more than 5 times for the US, to 280 products, and 6 times for the European Union to 385 products. In 2022, ASEAN (South-East Asia) economy imported 369 critical products from China (an increase of more than 10 times since 2003).
Dependence on Chinese supply: USA and EU
Experts from Allianz Trade indicate that the United States is most dependent on critical supplies from China. This is almost 50% of products of crucial importance to the economy. They besides item the clear shift of concentration of critical dependence towards higher value-added sectors, peculiarly as regards EU imports from China.
Overall, Allianz Trade in its study recognises the pattern of divergence between emerging and developed economies. At least 30% of Chinese imports will be critical for developed economies (except South Korea) and little than 15% of Chinese imports will be critical for emerging economies (except Brazil).
China strengthens its position in global supply chains
There is no uncertainty for Allianz Trade experts that China's strong position in the global supply chain will proceed to supply any support for their growth. They indicate that the nonsubjective of the State's economical and export policy is to increase production with higher added value (‘Made in China 2025) to become the main driver of growth, peculiarly in areas specified as the production/export of electrical vehicles, batteries and solar products. Chinese cars stormed the home marketplace in just a fewer years. Now they're moving to global markets. Despite the fresh slowdown in global demand, the Allianz study foresees that electrical vehicles will stay a clear point in the automotive sector in the face of the ongoing ecological transition, and the quality-to-price ratio is simply a key advantage that puts Chinese electrical vehicle manufacturers at the forefront of the world.
China will besides definitely dominate the automotive electrical batteries sector. They now control almost 56% of the global market.
The Allianz Trade study highlights the crucial advancement China has made in renewable energy sources, accounting for over 80% of global solar module production capacity and over 80% of solar cell export. China's current dominant position in these emerging industries and future growth, according to Allianz analysts, will be put to the test due to increasingly wide scope of protectionism, geopolitical tensions, restrictions and sanctions.
Former textiles, fresh technologies
In fresh years, according to Allianz Trade, the industry's critical dependence on imports from China has shifted from textile, clothing to computers, telecommunications, electronics and household appliances.
For the United States, the number of critical dependence on imports from China in the textile sector decreased from 81 in 2013 to 64 in 2022, while for computers, telecommunications, electronics and household appliances the number increased from 57 to 82 during this period.
Similarly, the situation is in the case of imports of the European Union from China. The number of critical dependencies in the computer and telecommunications, electronics and household appliances sector accounted for 73 percent of the full value in 2022. In 2003, it was 16 percent. The textile manufacture in 2003 was dependent on Chinese imports in 57%, and in 2022 only in 12%.
Allianz Trade predicts that China is moving towards a lower growth trend and their economy will increase by an average of 3.9% y/y between 2025 and 2029, remaining a key supplier to the world.
This is another study showing the actual state of affairs, indicating that to decouplingwhether derisking The road is far away.
Source:
allianz-trade.com/en_global/news-insights/economic-insights/China-keeping-dragon-awake.html
Author: 梁安基 Andrzej Z. Liang, 上海 Shanghai, 中国 China
Email: [email protected]
Editorial: Leszek B.
Email: [email protected]
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