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International News From the Field: China

China has loosened its COVID-19 policies, including rules covering quarantine, people’s movements, lockdowns, and testing. Is China back? Signs look positive for the Year of the Rabbit. For more industry intel and other tidbits, read on.
Jan 19, 2023

In December 2022, China's Purchasing Managers' Index (PMI) resided at about 47, shrinking by 6.5% year over year. December is the third consecutive month below 50, putting increased pressure on the manufacturing industry. The macroeconomic environment is showing positive signs, including improvements in the supply chain, logistics, and consumption, all of which are ultimately driven by the relaxation of the country’s COVID-19 policies.

According to the latest release by the Chinese Association of Automobile Manufacturers (CAAM), automobile production and sales reported 27.021 million units and 26.864 million units in 2022 (3.4% and 2.1% YOY growth, respectively). Passenger car production and sales reached 23.836 million units and 23.563 million units (11.2% and 9.5% YOY), while the production and sales of EVs reached 7.058 million units and 6.887 million units (96.9% and 93.4% YOY). Additionally, per the China Passenger Car Association (CPCA) in Shanghai, Tesla delivered more than 100,000 units in November, an increase of 40% against October (89% YOY). This is an all-time record for monthly deliveries in China’s auto market.

A few recently announced projects and investment news items are listed below:

  • ABB Robotics began production on a robotics super factory in Shanghai’s Pudong district on Dec. 2. With an investment of $150 million, the 720,000-square-meter facility is ABB's largest robot research, production, and application base. The leading-edge concept of "robots to build robots" is now a reality. ABB plans for the robots produced by this super factory to not only supply China's domestic demand but also be exported to many countries and regions.

  • Due to the sharp increase in sales of BYD's electric vehicles, production capacity of its key components needs to be improved. To further expand the production capacity of these components, BYD will invest another $928 million to set up a production base in Dongguan.

  • Chengdu Haoneng Technology will invest $78 million in a new facility in Luzhou to supply electric vehicle parts. The manufacturing site will produce motor shafts for new energy vehicles, with a planned annual capacity of 2 million parts.

  • FuturaSun, the leading Italian manufacturer of high-efficiency photovoltaic panels, established its China headquarters in Suzhou, Jiangsu, completing a total of $214.29 million in this investment cycle for research, development, and production of photovoltaic products.

  • Kia, South Korea’s second-largest carmaker, is considering an investment of $754 million in China, which had originally been set aside for Russia, to transform its ailing unit in the world’s top automobile market into a production base for exports to Southeast Asia and other regions.

  • Yaoning Science and Technology, a power battery project, has officially started construction on its Jianhu, Jiangsu, facility with a $1.43 billion investment. The site is expected to reach a production capacity of 12 GWh.

  • Wuhu Ecco Power System is investing $428.5 million to produce dedicated hybrid transmissions (DHT) for EVs in its second phase. The annual output of its first phase is 300,000 units, while plans are to reach 450,000 units produced with the completion of the investment cycle. Wuhu’s production of DHT on this site is dedicated to supplying Chery Motor’s passenger cars.

For more information, please contact Fred Qian at fredqian@AMTchina.org.

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Author
Fred Qian
General Manager - Shanghai Technology and Service Center of AMT
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