In the global high-tech field, the presence of Chinese companies has further increased. Nihon Keizai Shimbun (Chinese version: Nikkei Chinese Network) has investigated the global share of major products and services in 2022. In terms of the global share of 18 categories such as cutting-edge materials and pure electric vehicles (EV), the share of Chinese companies has increased. China and the United States, which account for 40% of the global economy, have strengthened protectionism from the perspective of economic security. However, with pure electric vehicles as the center, it is becoming more difficult for the supply chain to get rid of dependence on China.
This time, the Nihon Keizai Shimbun (Chinese version: Nikkei Chinese Network) conducted a 2022 survey on the share of major goods and services, targeting 63 categories of important final products, services, core components, and materials in global economic activities. “. Among them, there are semiconductor-related fields where China and the United States are fiercely competing, and the pure electric vehicle field where the industrial structure is constantly changing.
After combing the top five companies in each category share, it is found that in 18 categories such as pure electric vehicles, battery materials, and LCD panels, the share of Chinese companies has increased. There are 13 categories in which Chinese companies account for more than 30% of the total.
The Biden administration of the United States passed the Inflation Reduction Act (IRA) in August 2022, deciding to spend about $369 billion on energy security and climate change. It has set up tax incentives for domestically produced pure electric vehicles and lithium-ion batteries, and is actively working to remove certain countries, including China, from the supply chain.
The obvious rise of Chinese companies is in the fields related to pure electric vehicles. In terms of pure electric vehicles, the combined share of the top three Chinese companies reached 27.7%, surpassing Tesla (18.9%) of the United States, which ranked first. Tesla’s share fell by 3.4 percentage points, while BYD’s share expanded from 6.9% to 11.5%, rising to second place.
In terms of insulators for lithium batteries, an important material used in pure electric vehicles, among the top five companies, four are Chinese companies, accounting for a combined share of 63%. Sinoma Technology, ranked second, has a share of 11%, which is a significant increase compared with 2021 when it failed to rank among the top five.
The share of BYD’s in-vehicle lithium-ion batteries has also expanded from 7.7% to 14.4%, and Chinese companies including the company account for more than 60% of the share. In terms of the supply of pure electric vehicles, it is obvious that both upstream and downstream are in the hands of Chinese companies. BYD’s financial report for January to June 2023 released on August 28 showed that its net profit was 10.9 billion yuan, three times that of the same period last year, and it still maintains a good momentum. It will build pure electric vehicles and other factories in Brazil in July. Gotion, which ranks No. 4 in China, has announced the policy of starting a German factory within 2023, which shows that it is becoming more and more difficult to get rid of China’s dependence in the field of pure electric vehicles.
In fact, the U.S. economic community reacted differently to the deepening confrontation with China. In addition to the movement of American Apple and others to disperse their supply chains from China to India, Sequoia Capital, a large American venture capital (VC) company, decided to divest its Chinese division in June and operate its China-US funds independently.
On the other hand, Tesla CEO (CEO) Elon Musk, who will visit China in May 2023, held talks with senior Chinese officials and stated that he “opposes decoupling and will expand business in China.”
In the field of semiconductors, as of July 1, 14 Chinese companies will implement initial public offerings (IPOs) in 2023, raising more than 1 trillion yen. Micron Technology of the United States has invested 4.3 billion yuan in China to introduce high-performance packaging and testing equipment in semiconductor factories. There are also active trends in business between China and the United States.
In the field of mobile communication infrastructure (base stations), which is the core of communication infrastructure, the share of Huawei, which has been sanctioned by the United States, has declined. While still at the top, its share dropped from 34% to 31%.
Although the share of 16 categories in China also declined, the largest decline was around 4%. Among them, the share of smartphones and household air conditioners still exceeds 30%.
In terms of the number of categories with the highest global share, the United States has 22, and China has 16. Japan has one less than 2021, stopping at 6 categories.
Kumiko Pivet, a senior manager at PricewaterhouseCoopers (PwC) Japan who is familiar with economic security and geopolitical risks, said, “In order to diversify risks, it is important to diversify supply chains across supply regions,” and on this basis, noted: ” There is also a tendency to transfer production outside of China, and the share of Chinese companies in the field of cutting-edge technology related to military power and national power may also decline in the future.”