China’s economic activity came to a halt last week due to the festivities, so we had some time to digress into other trade-related matters.
For example, we asked two LLMs to give their best shot at predicting the global market share of electric car production over the next five years. Here’s what they came up with
As for the results and our opinion… well, frankly, there are so many issues that we don’t know where to begin.
In a thorough analysis, the Jacques Delors Institute explores alternatives for the EU automotive industry to address several concurrent challenges. It rightly acknowledges that the thousands of suppliers in the EU auto industry, many of which are SMEs, will be the most affected.
From a trade policy perspective, we agree with the report suggesting that the EU consider long-term region-to-region agreements focused on diagonal cumulation of rules of origin. It’s a tough task, though.
It is easy to understand China’s concealed angst over resolving the dispute with the EU regarding electric cars.
Tesla and BMW have joined Chinese electric vehicle manufacturers in challenging the European Union’s tariffs on Chinese-made EVs, filing cases with the Court of Justice of the European Union
The Ministry of Commerce announced that in the four days starting January 20, it received subsidy applications for 10.79 million electronic devices, following the expansion of the trade-in program to include mobile phones, tablets, and smartwatches.
Automobile and home appliance trade-ins had reached 34,000 and 1.04 million units, respectively, as of Jan 23, according to the ministry.
Similar programs were implemented in 2024 but yielded modest results. Retail sales of consumer goods grew by just 3.5% year-on-year, a figure below China’s typical growth rates and economic needs. Notably, in 2024, nearly 30% of nationwide per capita consumption expenditure was spent on food.
The case was first put on hold last year, only to be resumed last week in a strategic move to prevent the proceedings from expiring. Now, the EU is buying time by putting the case against China on hold once again
Germany’s export performance to China and the rest of the world shows virtually no correlation.
Chinese authorities acknowledge the sizable gap. Official reports from SAFE explicitly state that the difference between customs and balance of payments (BoP) data is “significant” (显著差异, as it says).
The explanations offered, though not particularly convincing, include merchanting trade (which is fully counted in customs data but excluded from BoP), misreporting (where some exporters overstate customs values for tax rebates but report accurately to BoP), the complexity of global value chains (leading to double-counting in customs but not in BoP), and time lags (with BoP recording when payment occurs and customs when goods are cleared).
These explanations don’t really clear up the puzzle, frankly. So far, the IMF has only asked China about the BoP in its regular reviews, not the Customs data.
High-performance AI server platforms fall under the category HS847180. China’s imports of this type of hardware increased significantly in 2024 compared to previous years.
Data from China’s Bureau of Statistics shows that the distribution of per capita disposable income is skewed, with the median being 16 percentage points lower than the mean. This gap is a simple sign of income inequality. It relates to the Gini coefficient, which is high in China—about 0.47—and reflects the unequal distribution of income. This inequality is influenced by factors like the urban-rural divide, the coastal-inland gap, the hukou system, and others.
AliExpress, Temu, Shein, TikTok & More: $100 billion export boom in a decade. The category, which didn’t exist in 2014, has now climbed to the second spot in China’s exports, just behind cellphones.
The measure was expected and explains the frantic front-loading activity by China in December to ship as much as possible to the U.S. In December 2024, China’s exports to the United States surged year on year by 16%. The Trump Administration’s measure has, in a way, made the yuan appear to appreciate against the dollar.
80% of Mexico’s exports and 78% of Canada’s are aimed at the U.S., while China’s is 15%. The export amounts are similar: Canada at $441 billion, Mexico at $472 billion, and China at $500 billion. An increase of 25% in tariffs for Canada and Mexico, along with 10% for China, represents a tax equivalent to approximately 1% of the U.S.’ GDP
China’s attempts to use Mexico as a backdoor for funneling exports into the U.S. are now effectively off the table.
China might turn its eyes to someone else—perhaps Morocco, the only country in Africa that enjoys a Free Trade Agreement with the U.S. and also a next-door neighbor of the EU.
CATL said in a securities filing on January 22 that its revenue fell between 8.7% and 11.2% last year
