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International News From the Field: China

Foreign direct investment into China, which hit a 15-year low in 2020, is back on track, and the country’s GDP has increased almost 13% YOY. Sales of traditional internal combustion automobiles are down significantly from a year ago, while electric ...
Aug 09, 2021

Foreign direct investment into China, which hit a 15-year low in 2020, is back on track, and the country’s GDP has increased almost 13% YOY. Sales of traditional internal combustion automobiles are down significantly from a year ago, while electric vehicle sales are up 200%. In its drive toward carbon neutrality, China launched its carbon trading market in July to initially focus on the power sector. For more industry intel and other tidbits, read on.

  • The China National Statistics Bureau reported that the GDP for the first half of 2021 was $8.2 trillion, a 12.7% increase YOY. 

  • According to the Organization for Economic Co-operation and Development (OECD), FDI into China in 2020 was at the lowest level in 15 years at $859 billion. This is not surprising, given the global FDI flow reduction of 35% during the pandemic. However, early signs in 2021 are promising, as FDI is already at $163 billion, the largest amount globally and surpassing pre-pandemic levels.

  • In mid-July, China officially launched its national carbon trading market, called the National Emissions Trading Scheme (ETS). It initially targets emissions from the power sector. This is in line with China’s commitment to peak carbon emissions by 2030 and achieve carbon neutrality by 2060. Within the manufacturing industry, the potential for reduced emissions is focused on technological progress and improved efficiencies.

  • DMG MORI achieved carbon neutrality globally in its own operations in May 2020. As of January 1, 2021, customers worldwide receive completely climate-neutral machines from all production plants, including China. This affects both the upstream and downstream supply chain and further fosters the development of renewable energy sources.

  • The China Association of Automobile Manufacturers (CAAM) released data for traditional ICE automotive production and sales for the first half of 2021, which are down considerably from 2020. Production is down 24% YOY, and sales are down 26%.

  • For new energy vehicles (NEV), both production and sales for the first half of the year were up 200% YOY.

  • Automobile exports for the first half of the year were 828,000 units, up 115% YOY. 11% of the exports were NEVs.

  • China’s economic recovery is supporting strong consumer demand for automobiles, but the microchip shortage and high raw material prices are creating challenges to meet the demand, much like in the rest of the world.

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

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