Source: Bloomberg
Author: Tom Hancock
Washington and Brussels have a consensus, that is, China is encountering sharp increase in excess production capacity, which may completely destroy related industries in other countries, which trigger protectionist measures in other countries to suppress damage.
"The excess capacity of China has distorted the global price and production model." U.S. Treasury Secretary Jennite Yellen said before visiting China that she emphasized that solar panels, electric vehicles and batteries.There are similar concerns in Europe. The European Commission Chairman Ulsula Von Delin launched an anti -subsidy survey on Chinese electric vehicles on the grounds of excess capacity.
Data shows that although China does exist in universal industrial capacity, a large part of which is driven by industries that Western countries do not compete with China, such as low -tech products, and products related to the downturn from the Chinese real estate market, such as from obedienceCement to furniture.
As far as electric vehicles are concerned, the problems facing developed economies seem to be more efficient in Chinese enterprises, not overcapacity.
Chinese leaders have been investing a lot of funds in the manufacturing industry, focusing on emerging industries such as electric vehicles, batteries and renewable energy, thinking that the slowing economy is looking for new sources of growth.Trade partners are worried that low -cost imported goods may pour into its market, lead to a reduction in employment opportunities, and therefore respond, and increase barriers to Chinese products in some cases.
Beijing has expressed his hope to suppress excess capacity, so analyzing these data is important because it can show where China thinks the problem is.Although there are overcapacity in the solar and battery fields, the electric vehicle industry may not be one of them.This can also be awakened for the developed economies. When pressureing China, it requires that it takes action to resolve excess capacity, and it is targeted.
The following is the situation of related data.
Price
From the perspective of other parts of the world, excess capacity can be felt at a lower price.China ’s export prices hit the largest decline in the past decade last year, but this was caused by low -tech products such as clothing and toys.
As China replaced Japan to become the world's largest car exporter, car exports surged last year, but the price has actually become higher.This shows that their attractiveness is not because of price reductions.
Chinese companies have not dumped electric vehicles to global markets at a lower cost.The average price of leading Chinese electric vehicles in Europe is about twice as much as domestic.
Utilization
The most common method for measuring excess capacity is the utilization rate of production capacity. 0 means that the factory is completely idle, and 100 means maximum use.
The capacity utilization rate of China's entire industry was less than 76%in 2022 and 2023. This is the longest period of time since Beijing launched the nationwide -nation -to -demand operation capacity action.The official comment believes that less than 80%of the normal level.
But this does not seem to cause alertness in Beijing.First of all, this ratio is several percentage points higher than in 2016, and has increased in recent quarters.Fan Lei, a Fan Lei of the National Lianlian Securities Economist, recently stated in research report that excess structural capacity is not serious.
Secondly, the data shows that although the utilization rate of electrical equipment including solar panels, including solar panels, is extremely low, it has lowered its overall data due to the industry with low technology content affected by China's real estate dilemma.Yamato Securities believes that this has led to a decrease in demand for products such as glass and cement, and the capacity utilization rate of these products has been reduced to 30%.
In other industries such as automobile manufacturing, chemical industry and wind turbine equipment, this ratio is moving closer to the 80%threshold.
