China’s manufacturing PMI reached 50.1 in September versus 49.4 in August and 49.0 in July, a reasonable indication that manufacturing is slowly recovering from the COVID-19 pandemic and that the market can sustainably overcome the electricity shortage. Foreign direct investment remains at a high level while manufacturing conditions keep improving.
New investments and projects recently announced:
In early October, Volkswagen Group announced investments in China worth $2.35 billion to remain competitive in the age of intelligent electric vehicles, its most significant single investment in the country. The investment is intended for the co-development of driving assistance functions for electric vehicles with startups: A $1 billion investment has been announced to support Horizon Robotics, while an additional $1.3 billion will be invested in a joint venture with the company. Horizon is one of the country's leading computing solutions providers for intelligent vehicles, specializing in software, algorithms, and chip design. Its solutions for driving assistance and smart-cabin functions have been used in several models by carmakers, including local startup Li Auto.
BYD (Build Your Dream) announced investments worth $1.41 billion in Fuyang, Anhui, to further increase the capacity production of passenger car parts, including vehicle wiring harnesses, motor precision injection molding parts, wheel harnesses, wheel hub bearings, seat covers, and other new-energy passenger car part production lines.
Chinese Automotive parts supplier Tuopu Group announced investments of $422.5 million in the Xi'an Economic Development District to produce front and rear subframes, suspension systems, and steering systems made of die-cast aluminum alloys. The project covers a new-energy vehicle lightweight chassis system production base and automotive ceiling, carpets, and other interior and exterior parts.
Japanese air conditioner manufacturer Daikin Group announced $246.5 million worth of investments to build a manufacturing facility in Huizhou, Guangdong, to produce Daikin VRV residential air conditioners, frequency converter boards, and other products.
Canadian Ballard Power Systems Co. has announced a $130 million investment to build a membrane electrode assembly manufacturing facility and a development center in Shanghai, China. The opening is planned for 2025. Plans are to produce up to 13 million membrane electrode assemblies annually, which should supply 20,000 vehicles.
Chinese power battery manufacturer CATL will invest $6.7 billion to build a manufacturing facility in Yichang, Hubei, to produce new-energy battery cathode materials such as iron phosphate, lithium iron phosphate, lithium cobalt, and renewable graphite, and ensure a stable supply of battery cathode materials. The company is also planning to expand production capacity and meet market demand.
For more information, please contact Fred Qian at fredqian@AMTchina.org.