China’s economic recovery continues to improve, although some industries endured a difficult five months to start 2023. Electrical machinery and equipment manufacturing have rebounded, with profits up 29.2%. Automobile manufacturing, one of the main pillars of the Chinese economy, rebounded as well, with profits up 24.3%, and general equipment manufacturing was up by 23.4%. A slight decline has been observed in equipment manufacturing by 0.1%, while computer, communications, and other electronic equipment manufacturing are down by a concerning 49.2%.
The latest PMI data revealed a softer improvement in operating conditions across China’s manufacturing sector during June. Production growth slowed notably from May’s 11-month high, while new order growth remained mild overall. At the same time, firms registered a further improvement in supplier performance, and input costs declined solidly. PMI resided at 49.0 in June, down 2.39% in the YOY comparison, and the most recent data of FDI in May went down to $10.85 billion, a decline of 18.42% YOY.
According to China’s National Bureau of Statistics, the output of metal-cutting machine tools was 244,000 units from January to May, down 2% YOY, and the output of metal-forming machines was 75,000 units, down 9.6% YOY. According to Chinese customs data, machine tool imports and exports from January to May totaled $13.36 billion, up 2% YOY. Imports totaled $4.74 billion, down 6.9% YOY, while exports totaled $8.62 billion, up 7.7% YOY.
On July 3, major Chinese automobile manufacturers FAW, Dongfeng Motor, SAIC, BAIC, BYD, Chery, JAC, Great Wall, NIO, Xiaopeng, and Tesla (Shanghai), as well as other automotive manufacturers, attended the Offline Ceremony of the 20 Millionth New Energy Automobile in China. China’s cumulative output of EVs exceeded 5 million units in September 2020, 10 million units in February 2022, and 20 million units in July this year. China is currently the world’s largest producer, seller, and exporter of new EVs.
The manufacturing industry has shown a significant difference between strong expectations and weak reality in the first semester of 2023. The manufacturing industry has shown a weak recovery in the first half of the year. However, many unfavorable factors are expected to be alleviated in the second half of the year, which will gradually narrow the expectation gap: the higher expectations of the market falling; and more importantly, the manufacturing industry actually recovering. Additionally, new investment is unanimously expected to gain momentum in the second half of the year.
A few recently announced projects and investment news items are listed below for your reference. Please reach out to learn more about any of these listed projects.
Porsche announced plans to build a vehicle production plant in Hefei to produce new EVs, including workshops, production lines, and ancillary facilities.
SEW-Eurodrive announced plans to invest $1.41 billion in Foshan to produce a series of motor, reducer, and frequency conversion control equipment.
UniTTEC Company Ltd. announced that the company will invest $277.78 million in the Pujiang economic development zone to build the 4-inch to 6-inch wafer polishing production line.
Jiangsu Bojun Industrial Technology Co. announced investments worth $57.14 million to build a production site for auto parts in Shan-he city. The investment will be made in new auto parts production lines, mold manufacturing, and ancillary facilities.
Zhejiang Hacres Transmission Technology Co. decided to expand production and invest $1.417 billion to build a manufacturing facility in Zao-yang city. The plans include new assembly lines of heavy-duty e-trucks and production lines of core parts, including ancillary facilities.
For more information, please contact Fred Qian at fredqian@AMTchina.org.