China’s automobile and spare parts will more than double in 2021 from a year earlier, surpassing China’s total exports by 30%, Bernstein researchers found.
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BEIJING – Bernstein analysts say China’s recent govt locks pose a greater risk of global inflation today than they did in 2020.
The researchers said in a statement on April 8 that the world had relied heavily on Chinese products since the outbreak.
Global exports to China are projected to grow by 15.4% in 2021, the lowest level since 2012.
China’s exports have increased over the past two years as the country was able to control the initial Govt explosion within weeks and resume production, while other parts of the world struggled to control the virus. China has maintained its zero Govt policy, while other countries have eased restrictions over the past year.
Over the past several weeks, China’s mainland has dealt with its worst Govt wave, with tougher locks and travel restrictions by foreign business leaders than it was in early 2020. Like Shanghai.
“We believe the macro impact of China’s lockdowns will be huge, and the market is still undecided,” Bernstein’s Jay Huang and a team said in a statement.
Compared to pre-epidemic conditions, Shanghai export container costs are five times higher and air freight rates are twice as high, the report said, citing similar pressures at supplier delivery time. “Therefore, there will be higher exports of inflation, especially to China’s big trading partners but at the same time China’s own demand recovery is delayed.”
Represents supply chain disruptions, Chinese electric car company Neo Announced Stop production Over the weekend, some production will resume on Thursday. German automaker Volkswagen Its factories in Shanghai and the northern province of Jilin were closed until at least Thursday.
These recent locks are at a point where global supply chains are already in trouble … We hope that the impact of this lockout will be greater in terms of global inflation and growth outlook than we saw in 2020.
Bernstein’s analysis found that China produces most of the foreign demand for containers, ships, rare earths and solar modules – with bulk mobile phones and PCs.
The report states that Chinese factories no longer complete not only the final assembly for those electronic products, but also manufacture components such as LCD panels and integrated circuits.
China’s first quarter trade data showed steady growth in exports. According to data released on Monday, the country’s producer price index and consumer price index rose faster than expected in March.
China, a growing car exporter
Since the onset of the epidemic, Bernstein has reported that China has become a significant manufacturer in the automotive sector, especially in the electric vehicle supply chain.
Analysts note that automobile and spare exports grew by an average of 119% in 2021 over the previous year, surpassing China’s total exports by 30%. The report states that the country accounts for about 74% of global battery cell production.
China is the world’s largest automotive market and was launched Promoting the development and purchase of electric vehicles over the past several years, primarily through subsidies. Accordingly, foreign automakers are beginning to attract the market Introduced electric vehicles to China In the last few years.
Now, Tesla, BMW and other automakers are increasingly making electric vehicles in China and exporting them to other countries, the Bernstein report said. State-owned automakers SAIC and Chery, which run on fuel, are increasingly exporting passenger vehicles from China, while sales of cars made in China to Chile, Egypt and Saudi Arabia are on the rise, the report said.
Although the report does not discuss the specific impact of Covid lockdowns on automated supply chains, analysts point out that many Korean and Japanese automakers faced production disruptions when Covid forced Wuhan to lock up in 2020.
In March, passenger car exports were up 14% to 107,000 units from a year earlier, with new passenger vehicles accounting for 10.7%, according to the Chinese Passenger Car Association. The report noted the impact of external uncertainty and the decline in exports to Europe.
China’s auto exports are estimated at approx Vehicle sales outside the country will be 3.7% in 2021, down from 2% in the previous two years, the Bernstein report said.
– Michael Bloom of CNBC contributed to this report.
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