China’s trade surplus in goods surged to a record $1.082tr in the twelve months to March. Nominal exports climbed 12.4% y/y, while imports contracted 4.3% y/y. Real exports have been even stronger (+18.2% y/y), with export prices continuing to decline. The trade surplus with ASEAN nations surged to a record $199bn as China expands its influence.
China has built a competitive advantage, and global lead, in key industries and all along the renewables supply chain. Beijing is flexing its control over the minerals supply chain. The 12-month moving totals for both motor vehicle and solar cell exports climbed to fresh highs in March. The slide in the motor vehicles PPI (-3.4% y/y in March) underscores the challenges facing auto industries globally, as China builds on its dominance in EVs. Indeed, China’s trade surplus in transport equipment hit a record $224bn in the twelve months to March.
China’s lead in EVs has been well documented. But the pace of innovation nevertheless remains breathtaking: last month, BYD shocked the industry by unveiling a charging system that could add about 470km in range in 5 minutes. CATL has now unveiled upgraded battery cells it claims can offer faster charging for electric vehicles than its rival BYD, offering a 520km range from just five minutes of charging time.
Industrial production has firmed, with a strong rise in the manufacture of computer, communications & other electronic equipment (+13.1% y/y) in March. The pace of Chinese innovation continues to accelerate. A research team at Fudan University has built the fastest semiconductor storage device ever reported. Huawei is preparing to test its Ascend 910D AI processor, aiming to rival Nvidia’s high-end chips, underscoring China’s semiconductor industry’s resilience.
