China’s emerging leadership in the electric vehicles trade

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China’s EV dominance and its impact on global trade | Can trade policy combat climate change? | Splitting up and realigning | More research from Hinrich Foundation

China’s EV dominance and its impact on global trade

Chinese automakers want to sell electric cars across America, finds Axios, and are planning to shake up the European market, writes the Financial Times. In the first half of 2023, China replaced Japan as a top auto exporter, says Richard Katz in Japan Economy Watch, while Bloomberg reports that a Chinese SUV was Sweden’s top-selling EV in July. Chinese firms are turning to Korea to access the US market, per Bloomberg. US experts and policymakers discuss the changing EV trade landscape for the Washington International Trade Association.

Mentioned publications

1. Chinese automakers want to sell electric cars across America – Joann Muller and Han Chen, Axios, July 27, 2023
   What are the prospects for Chinese electric vehicle sales in the US?
2. The Chinese carmakers planning to shake up the European market – Financial Times, June 29, 2023
   Cars with internal combustion engines will no longer be sold in Europe after 2035.
3. China Replaces Japan As Top Auto Exporter in Jan-June 2023 – Richard Katz, Japan Economy Watch, August 3, 2023
   China could export as many as 4.4 million vehicles in 2023.
4. A Chinese SUV Was Sweden’s Best-Selling Electric Vehicle in July – Bloomberg, August 3, 2023
   BYD had Sweden’s best-selling EV in July.
5. Chinese Firms Are Seeking Korean Partners to Skirt US EV Rules – Bloomberg, July 30, 2023
   Chinese firms are investing in South Korea’s battery industry as a gateway to the US market.
6. China and the Rise of Electric Vehicles – Panel Discussion, Washington International Trade Association, August 3, 2023
   What impact will China’s rising dominance in EV production and exports have on the rest of the world?

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Can trade policy combat climate change?

China’s zombie supply chains are counteracting efforts to hold producers accountable for harmful environmental practices, writes Nithin Coca in the Wire China. A green free trade agreement can harness the market to drive the transition to green products, argue Gordon Hanson and Matthew Slaughter in Foreign Affairs. Better trade policy shaping agricultural trade can cut emissions, says Dan Blaustein-Rejto from the Breakthrough Institute.

Mentioned publications

1. Zombie Supply Chains – Nithin Coca, The Wire China, July 16, 2023
   Chinese companies are thwarting efforts to shut down environmentally unsustainable supply chains.
2. How Commerce Can Save the Climate: The Case for a Green Free Trade Agreement – Gordon H. Hanson and Matthew J. Slaughter, Foreign Affairs, March/April 2023
   The market can drive the transition to climate-friendly products aided by targeted trade agreements.
3. How to Cut Emissions Through Agricultural Trade – Dan Blaustein-Rejto, The Breakthrough Institute, June 1, 2023
   Should policymakers encourage more trade in agricultural goods from low-emission growers?

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Splitting up and realigning

Bath and Body Works provides an example of reshoring and hyper-localizing, per the Wall Street Journal. The US fashion industry is shifting sourcing away from China, finds a 2023 benchmarking study by the US Fashion Industry Association. Yu Yongding explains China’s response to decoupling in Project Syndicate. The Wall Street Journal reports that Chinese investment is fleeing the West for friendlier shores, while venture capital is evaporating in China, says the South China Morning Post.

Mentioned publications

1. A Soap Maker Cracks the Code to ‘Made in America’ – The Wall Street Journal, July 25, 2023
   Lessons from Bath & Body Works about reshoring and localizing supply chains.
2. 2023 Fashion Industry Benchmarking Study – Sheng Lu, United States Fashion Industry Association, July 2023
   Nearly 80 percent of respondents plan to reduce apparel sourcing from China over the next two years.
3. China’s Response to Decoupling – Yu Yongding, Project Syndicate, June 28, 2023
   Disengagement from global supply chains would spell trouble for both China and the West.
4. Chinese Money Flees the Western World – The Wall Street Journal, July 24, 2023
   Direct overseas investment from China to the rest of the world fell by 18% year on year.
5. Venture capital to China evaporates amid geopolitical hostilities and economic uncertainties – South China Morning Post, July 28, 2023
   China-focused VC funds raised US$2.7 billion in Q2, down 54.2 percent from the previous quarter.

Mentioned publications from HF:

• The geopolitics of electric vehicles: techno-nationalism reshapes the automotive industry
• Shades of OPEC loom over global carbon market
• The price of dependency: The rhetoric and reality of de-risking US-China ties

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