If we recall correctly, Slovakia is the country with the highest car production per capita. About eight percent of the total car exports from Slovakia are aimed at China, with Volkswagen as the second-largest employer in the country.
Sources claim that the Gotion group will open a battery factory in Šurany, approximately 100 km away from Bratislava, which is similar to the distance from Budapest in Hungary. Volkswagen is the largest shareholder of the Chinese group Gotion
Source China Customs. Estimate SOAPBOX
In 2023, China exported $66 billion worth of goods under the simplified procedures designed for low-cost items, accounting for 2% of Chinese exports. However, when considering CBEC as a single product, it already ranks as the third most exported individual item from China. We are sure that CBEC will take the top spot in 2024, surpassing even cellphones and laptops.
CBEC exports increased by more than 20% in both volume and value in Q1 2024.
According to sources, Temu, Alibaba, TikTok, and Shein combined ship more than 10,000 tons per day, or the equivalent of 108 Boeing 777 freighters.
In terms of the European Union, China’s CBEC exports reached a total of $13 billion, equivalent to approximately €30 per year for every single EU citizen. These are articles whose free-on-board price per kilogram is barely €4.
While the EU charges VAT for imports regardless of their declared value, there’s a threshold of €150 below which the item is exempt from duties. We tend to believe the aforementioned $13 billion is not included in EUROSTAT figures.
Under this regime, exports to the United States are significantly higher ($18 billion according to China Customs). The question arises whether labor costs to collect import duties would exceed the taxes collected. The de minimis amount for importing goods into the U.S. without paying duties is $800. As for VAT, the U.S. system does not VAT.
Exports of pharmaceutical products from the EU to China increased threefold in the last decade, growing to $28 billion in 2023 from $9 billion in 2013. Two-thirds of China’s pharmaceutical imports are supplied by the European Union.
Source China Customs
The U.S. drops to the 7th spot while we believe China will strengthen its bonds with Brazil, entering the top-5. It is all politics now.
There is a non-negligible chance that Russia might outrank the U.S as a supplier to China in 2024
The average FOB price of e-cars exported in Q1 2024 dropped $1,500 per unit compared with one year earlier. The drop is consistent with recent price cuts by BYD in an already fierce price war.
China vehemently rejects accusations of overcapacity, but it is undeniable. Even the NDRC—China’s primary macroeconomic control institution—expressed concern about the excess supply in a note issued on April 22.
The only bright spot is the exports of affordable items via cross-border e-commerce, which flood the U.S. and the EU.
Prices to the EU drop by around $1,600, while elsewhere the drop is $1,300.
Notice the average price free-on-board is in Chinese yuan. Source is China Customs
Driven by exports of electric cars, exports to Uzbekistan soar.
This also increases China’s surplus with the central Asian country. Its surplus in goods in 2023 is equivalent to 17% of Uzbekistan’s GDP.
Source China Customs
China’s electric cars exported under the entrepot trade regime accounted for more than $9 billion in 2023.
Nearly three-quarters of its exports under this regime were to the EU (49%) and the UK (23%).
The rest of the countries worldwide barely reach 1 or 2 percent, if anything.
Ahead of Xi Jinping’s visit to Macron next month, we wanted to know if the probe launched by China made any dent in Chinese imports of brandy from the EU
In the first quarter, imports of French brandy into China increased by 4% in value while decreasing 7% in volume
While Brazil plays ball, China received something of a slap in the face from Argentina after Milei’s government rejected joining BRICS. China’s reaction was swift. Check it out.
Source China Customs
Since the invasion of Ukraine, China has significantly increased its crude oil imports from Russia. The price per barrel paid is 5% below the average price of its total crude oil imports. In Q1 2024, China imported 2.4 million barrels daily from Russia, up from 1.6 million in the same period of 2022
Source China Customs
Once again, China promises Angola help to diversify its economy away from crude oil. The thing is, China’s interests in Angola appear to revolve solely around infrastructure projects executed by Chinese companies and Angola’s crude oil. In a recent meeting with the president of Angola, Xi Jinping emphasized China’s readiness to assist with infrastructure projects. As for China’s interest in importing from Angola, judge for yourself.
In Q1 2024, crude oil imports from Angola increased to 52 million barrels from 46 million a year earlier.
Source China Customs
According to Xinhua, China will amend the country’s Statistics Law to combat statistics fraud. The problem is, China said the same thing in September 2018, and yet again before that, in 2017, when new regulations came into place.
At that time, it was claimed for the nth time that China would strengthen the supervision of illegal acts such as statistical falsification. We believe it is rather a systemic issue.
As anecdotal evidence that is systemic and stemming from leadership fanfare: since the emergence of the “new-3 productive forces” slogan, towns, provinces, and ports have hurried to report increased exports of “the new-3” in the first quarter.
In the SOAPBOX issue of April 8, we talked about the weakness of China’s services exports compared to exporting goods. Now, former PBoC staff member Sheng Songcheng expresses dismay when comparing China’s services sector to that of the U.S.
For example, a country like Spain doubles China’s exports in travel services, and when it comes to exports of intellectual property, the U.S. outperforms China by orders of magnitude.
As of April, we are thrilled to collaborate with MERICS, the largest European research institute focusing solely on the analysis of contemporary China and its relations with Europe. We are proud to contribute to its monthly newsletter, MERICS Europe China 360°, though our collaboration represents only a small fraction of its impressive comprehensive coverage.
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