In 2020, a year full of challenges, China’s GDP grew 2.3% and is expected to expand 6% in 2021. This year is off to an impressive start with auto production growing leaps and bounds. New energy vehicles (NEV), particularly EVs, showed a 286% YOY increase in January with 194,000 units produced. Construction equipment demand and railway projects add to the need for manufacturing technology. Even with the holiday break to usher in the Year of the Ox, February’s PMI remained above 50 for the 12th consecutive month. For more industry intel and other tidbits, read on.
China’s Ministry of Industry and Information Technology announced that the industrial added value in 2020 was $4.47 trillion. For the 11th consecutive year, China ranked first in the world for manufacturing output.
Even with all the challenges of 2020, China’s GDP grew 2.3% to a record high of $14.28 trillion. GDP growth in 2021 is predicted to be 6%.
The PMI for February was 50.6, the 12th consecutive month above 50. This is particularly strong, given that there was a seven-to-10-day holiday as China celebrated Lunar New Year and ushered in the Year of the Ox.
Due to the continued strong demand for construction machinery, the production of excavators and loaders increased 70% YOY for the first two months of 2021.
In 2021, the total investment for railway construction in the Yangtze-Delta region will be over $11 billion. They are scheduled to complete 520 miles of railway, representing six of the 11 projects in the regional program.
NEV production in January was 194,000 units – a 286% YOY increase! Total vehicle production in January was 2.4 million units, representing a 35% YOY increase.
Vehicle consumption demands in China have recovered rapidly and are growing steadily. The Shanghai Automobile Industry Corp (SAIC), with their JV partners GM and Volkswagen, produced 273,000 units in February versus 32,000 units in the same month last year. They sold 246,000 units in February versus 47,000 units in February 2020.
Build Your Dreams Co. Ltd. (BYD) produced 34,100 NEV units in January-February, a 240% YOY increase.
Even with these impressive production numbers, China has not been spared from the global shortage of automotive chips. The negative impact on automotive production volume is estimated to be 5%. As with elsewhere in the world, the shortage could last until the third quarter of this year.
In the January to February timeframe, exports grew 50% YOY with a total of $471 billion and imports grew 14% YOY with a total of $366 billion.