In late July, the National Bureau of Statistics of China released its report on the first half of 2023, revealing significant insights into the Chinese mainland's economic performance. Notably, nominal GDP denominated in U.S. dollars stood at an approximate value of $8.56 trillion at average exchange rates, reflecting a modest decrease of $162.44 billion or 1.9% year over year.
Breaking down these figures further by quarter, the first quarter saw the equivalent of $4.16 trillion, a YOY decline of 2.7%, and a net reduction of $113.5 billion. The second quarter showed a nominal GDP of $4.39 trillion, marking a 1.1% YOY decrease, which translates to a net reduction of $49.75 billion.
Overall, the first half of 2023 witnessed China's total economic output reaching 59.3 trillion yuan, showcasing a commendable 5.5% YOY increase. The second quarter alone accounted for a remarkable 30.8 trillion yuan, indicating a substantial YOY growth of 6.3%. A significant contributing factor to these dynamics was the fluctuation in exchange rates, underscoring their role in shaping the economic landscape.
In July, China's Purchasing Managers' Index reached 49.3, reflecting a notable increase of 0.3% compared to the previous month. This upward trend indicates a continued improvement in the manufacturing sector's performance.
According to data released by the China Association of Automobile Manufacturers, the production and sales figures for the first half of 2023 amounted to an impressive 13.25 million units and 13.24 million units, respectively. These figures represent a substantial year-over-year growth of 9.3% and 9.8%. Notably, the EV segment demonstrated remarkable progress, with production and sales reaching 3.79 million units and 3.75 million units, showcasing an outstanding YOY increase of 42.4% and 44.1%.
China Eastern Airlines achieved a significant milestone this month by officially receiving the second domestically manufactured C919 airplane in Shanghai. The commercial deployment of the C919 is advancing rapidly, with over 30 airlines expressing interest and orders exceeding 1,000 units globally. Anticipating robust market demand, the manufacturing of the C919 is poised to generate a potential market worth hundreds of billions of dollars over the coming decades in China.
China's Ministry of Industry and Information Technology reported a notable expansion in industrial investment, experiencing a YOY growth of 8.9% during the year’s first half. The ministry is set to introduce policies to foster the seamless progress of the industrial and economic landscape. Collaborating with the China Development Bank, these efforts will include the implementation of special loans to bolster investments in the manufacturing sector, particularly in emerging technologies and industries such as high-end medical equipment, general aviation, new energy, new materials, EVs, electrical equipment, photovoltaic systems, and communication equipment.
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.
In late July, Volkswagen announced an investment of $700 million in a joint venture with Chinese EV manufacturer Xiaopeng. Plans are to launch two Volkswagen-branded electric models by 2026.
Yangtze Optical Fibre announced investments worth $839 million to produce third-generation semiconductor components in the East Lake High Tech Development Zone in Wuhan, Hubei.
To enhance its auto parts production capabilities, Chery Holdings Group has taken a significant step toward establishing a dedicated production base in Qingdao, Shandong. This strategic move involves a substantial investment of $1.4 billion to manufacture crucial automotive components. Once this endeavor reaches completion, the produced parts will serve as essential supplies for Chery cars, contributing to the overall efficiency and quality of the brand's vehicles.
With a total investment of $210 million, ZF’s EV parts production site is now fully operational. The facility will house electric drive system assembly production lines, inspection production lines, a factory building, and ancillary facilities.
Beijing Hangcai Youchuang Polymer Materials Co. announced investments worth $90 million to produce aviation components in Beijing.
Yigong Smart Equipment Group announced an investment of $107 million to produce automotive transmissions in Yichun, Heilongjiang, with an annual output of 1.2 million units.
For more information, please contact Fred Qian at fredqian@AMTchina.org.