China Lays Out “Three Aces” in Trade Fight Against West

Chinese Commerce Minister Wang Wentao denounced Western protectionist policies and geopolitical conflicts as major obstacles that exacerbate the difficulties facing the Chinese economy and foreign trade in the international arena.

But China has “three aces up its sleeve,” which the Asian country’s media also calls the “three sharpest sabers” – from record exports of electric cars to lithium batteries and innovative solar panels.

This is official data recognized internationally: in 2023, China overtook Japan to become the world’s leading car exporter in the number of cars sold overseas. The result is mainly due to the mass production of electric vehicles. International experts refer to nearly 4.91 million cars exported from Chinese factories in 2023 (+57.9%). However, Administration of Customs of China in an official bulletin writes that last year, China’s exports of passenger cars, including chassis with installed engines, totaled 5.22 million units, recording a 57% increase from 2022.

However, according to the Japan Automobile Manufacturers Association (JAMA), Japanese manufacturers exported 4.42 million cars, trucks, and buses last year (+16%).

Last year, economic growth in the world’s second-largest economy was driven by this so-called “new triad” of the green economy, which grew 30% to 1 trillion yuan ($139.3 billion). In addition to electric vehicles, China is increasing the production and export of both lithium batteries and solar panels by leaps and bounds.

The International Monetary Fund (IMF) has revised upward its forecasts for China’s economic growth in 2024. In the updated report World Economic Outlook 2024, the IMF experts noted that the Chinese economy, after +5.2% in 2023, should grow by 4.6%, and in 2025 slow down to +4.1%. While the estimate for 2025 remained unchanged, the forecast for 2024 was adjusted upwards, by 0.4 percentage points, from the previous October 2023 forecast.

The Fund also expects a slowdown in Japan’s economy, which, after growing by 1.9% in 2023, is expected to expand by 0.9% this year (0.1 p.p. less than the October estimate). However, the forecast for 2025, in which the Japanese economy may grow by 0.8%, was “slightly improved” (+0.2 p.p.).

For India, after 6.7% growth in 2023, IMF analysts predict a 6.5% increase in GDP in both the 2024 fiscal year (starting in April) and the next fiscal year. Valuations were improved by 0.2 p.p. in both periods.