Unprecedented Export Growth and Emerging Challenges

China’s remarkable strides in exporting electric vehicles (EVs), batteries, and solar panels are encountering substantial challenges, according to a comprehensive report by Natixis. Coined as the “new three” sectors, these products have witnessed significant export growth, constituting 4.5% of China’s total exports.

Global Shifts and China’s Export Outlook

Natixis analysts highlight that China’s dominance in these sectors will face headwinds due to industry overcapacity, price wars, and escalating trade barriers. Notably, these challenges are not confined to Western nations but also extend to countries like India and Turkey. This raises a critical global question of striking a balance between cost-effective green transition goods and ensuring supply-chain security.

Shifting Dynamics: China’s 2023 Dominance vs. 2024 Challenges

China’s robust production dominance in 2023—53% of global EVs, 62% of batteries, and 94% of solar panels—may encounter hurdles in 2024. Alicia Garcia-Herrero, Natixis’ Asia-Pacific chief economist, underscores concerns about a potential slowdown in the domestic market and growing trade barriers abroad.

European Regulations and Implications

The European Commission’s proposed “Net Zero Industry Act” legislation aims for a 40% self-sufficiency ratio in manufacturing net-zero technologies by 2030. Anti-subsidy investigations into Chinese EV imports and potential import duties from Washington further complicate China’s export scenario, adding layers of uncertainty to the green energy market.

As China navigates through these challenges, the global green energy market stands at a crossroads, prompting a reevaluation of China’s dominance amid evolving international policies and market trends.

Source：scmp.com