The numbers are still rising, but the momentum in China’s exports is somewhat gone. In Europe, the country is investing primarily in the production of car batteries – and is focusing on founding new companies.
China’s foreign trade lost momentum in April. As Beijing Customs announced on Tuesday, exports rose by 8.5 percent year-on-year to $295.4 billion. However, the increase was lower than in the previous month, when an increase of 14.8 percent was recorded. Imports to the People’s Republic fell sharply in April, falling by 7.9 percent year-on-year.
China is aiming for an economic upswing this year after the end of its strict corona policy. In the first quarter, the second largest economy had grown surprisingly strongly by 4.5 percent compared to the same period last year. Recently, however, there have been signs that the recovery could stall. According to the official Purchasing Managers’ Index (PMI), the mood in industry had cooled off significantly in April.
investments in Europe
Meanwhile, China’s investment activity in Europe has shifted sharply in the direction of car batteries and company start-ups. For the first time since 2008, greenfield projects, in which subsidiaries are founded or new production facilities are built, have overtaken the previously prevailing company takeovers, according to a study by the Berlin China Institute Merics and the Rhodium Group on Tuesday. Takeovers even fell by 22 percent to 3.4 billion euros last year.
The “greenfield” restarts took place almost exclusively in the auto industry: Chinese battery giants such as CATL, Envision AESC and SVOLT invested in plants in Germany, Great Britain, France and Hungary. These four countries were also the largest recipient countries, accounting for 88 percent of China’s direct investment in Europe. In addition to greenfield investments, they also recorded the most takeovers and mergers.
“The changed investment patterns clearly show how strong the Chinese competition is, especially in e-mobility,” said Max Zenglein, chief economist at Merics. “Greenfield investments are also less strictly regulated than controversial acquisitions in the critical infrastructure or technology sector.” In order to become a sustained driver for investments, however, they would have to continue to rise, otherwise their effect will evaporate.
“Chinese companies are investing billions in the European e-mobility value chain,” said Agatha Kratz, director at Rhodium Group. “They have become important players in the energy transition there.”
Source: Stern
