China Chamber of Commerce for Machinery and Electronics: my country’s photovoltaic generator exports

On September 1, the Expert Committee of the China Chamber of Commerce for Machinery and Electronics released an analysis of the foreign trade situation of my country's motor industry in the first half of 2022. In the first half of 2022, the export value of my country's motor products increased by 10.1% year-on-year to US$10.89 billion, setting a new high in the first half of the year, but the growth rate was significantly lower than that in the same period of the previous year (40.7%). If the cost increase factor brought about by the rising price of raw materials is excluded, the export of most enterprises has remained flat or even dropped. In the first half of the year, the growth rate of my country's motor product exports weakened significantly, mainly due to factors such as sluggish demand caused by global inflation, rising raw material prices, poor shipping, and repeated domestic epidemics.

The motor statistical caliber described in this article includes motors, generators and generator sets. The following is a detailed description of the overall export situation, classified exports and overseas markets of motor products in the first half of 2022.

01

my country’s motor import and export situation in the first half of 2022

(1) The export value of my country's motor products was 10.89 billion US dollars, a record high in the first half of the year

According to my country's customs statistics, in the first half of 2022, my country's motor product exports were approximately US$10.89 billion, a year-on-year increase of 10.1%, and the export value hit a new half-year export high; imports were approximately US$2.61 billion, a year-on-year decrease of 3.3%. The trade surplus was approximately US$8.28 billion, a year-on-year increase of 15.1%. In terms of monthly exports, motor exports in January were US$2.02 billion, a year-on-year increase of 32.8%, the highest single month in the first half of the year. picture

(Data: China Customs Cartography: Electrician Branch)

(2) Guangdong is the largest province in domestic motor export

Guangdong, Jiangsu, Zhejiang, and Tianjin are the main export regions of my country's motors in the first half of 2022, accounting for 65.8% of the overall exports of the motor industry. In the first half of 2022, Guangdong Province's motor export volume was 2.38 billion US dollars, an increase of 11.5% year-on-year, accounting for 20.4% of the share, making it the largest province in domestic motor export. Jiangsu Province's exports were US$2.15 billion, a year-on-year increase of 17%, accounting for 18.4%, ranking second. Zhejiang Province’s exports were US$1.98 billion, a year-on-year increase of 18.1%, accounting for 16.9%, ranking third.

(3) The growth rate of exports to Europe and North America was higher than the overall export growth rate, while exports to Vietnam dropped sharply.

In the first half of 2022, my country's exports of motor products to North America were US$1.74 billion, a year-on-year increase of 22.9%, and exports to Europe were US$3.14 billion, a year-on-year increase of 27.1%. Among them, exports to the EU were US$2.68 billion, a year-on-year increase of 31.3%, accounting for my country 24.6% of the overall export of electric motors. In addition, export growth rates to Latin America, Africa, and Asia were 8.0%, 19.8%, and -5.3% respectively.

In the first half of 2022, the United States, Germany, Japan, South Korea, Italy, Vietnam, India, Mexico, Indonesia, and Thailand are the top ten destinations for my country's motor exports, accounting for 46.7% of my country's total exports of motor products.

Among them, China's export of motor products to the United States was US$1.58 billion, an increase of 23.1% year-on-year, accounting for 14.5%, ranking first; exports to Germany were US$520 million, an increase of 9.8% year-on-year, accounting for 4.8%, ranking second. Exports to Japan amounted to US$480 million, a year-on-year increase of 1.9%, accounting for 4.4%, ranking third.

In addition, in the first half of the year, the export of motor products to Vietnam decreased by 62.15% year-on-year to US$343 million. The Ministry of Industry and Trade of Vietnam stated at the beginning of 2022 that in recent years, due to the lack of input facilities to transmit wind and solar energy to the national grid, Vietnam still faces many difficulties in the use of renewable energy in 2022, saying that it will not add any to this year's plan Wind and solar. In 2021, wind turbines will be my country's main motor products exported to Vietnam. In the first half of 2022, the growth rate of wind turbine exports to Vietnam will drop by 100%.

(Data: China Customs Tabulation: Electrician Branch)

(4) my country’s imports of motor products from Brazil have surged

In the first half of 2022, my country imported US$2.61 billion in electrical products, a year-on-year decrease of 3.3%. Japan, Germany, Vietnam, South Korea, and Brazil are the top five import sources of electrical products in my country, accounting for 59.6% of the total. Among them, my country's imports of motor products from Brazil surged 4040.8% to US$110 million. The main reason for the increase was the low base in the same period last year.

In the first half of 2022, my country's imports of motor products from Japan were approximately US$670 million, a year-on-year increase of 11%, ranking first; China's imports of motor products from Germany were approximately US$510 million, a year-on-year decrease of 2.4%, ranking second. Electrical products imported from Vietnam amounted to approximately US$140 million, a year-on-year decrease of 2%, ranking third.

(5) The export volume of small and medium-sized motors maintained rapid growth, while the export volume of micro motors decreased year-on-year.

In the first half of 2022, the most important products exported by my country's motor products are still small and medium-sized motors, with an export value of 5.72 billion US dollars, a year-on-year increase of 16.8%. During the same period, the export value of large motors was US$540 million, an increase of 18.3% year-on-year. Generator sets grew steadily, with exports of 2.85 billion US dollars, a year-on-year increase of 2.4%. The export value of micro-motors decreased by 12.5% year-on-year to US$1.75 billion. my country's micro-motor industry is mainly distributed in the eastern coastal areas. Among them, the micro-motor industry in the Pearl River Delta and Yangtze River Delta has a complete supply chain and large-scale production and manufacturing capabilities. Due to the domestic epidemic situation, some provinces and cities in the Pearl River Delta and Yangtze River Delta regions have experienced factory shutdowns and production reductions. Raw materials, production, logistics, labor, etc. have been restricted and hindered to varying degrees, affecting exports.

(Data: China Customs Tabulation: Electrician Branch)

❖Note: Large motors (≥750KVA), medium and small motors (<37.5W<750KVA) micro motors (≤37.5W)

(6) DC motors and DC generators with output power ≤ 750W are still the largest single product exported by my country's motors

In terms of export products, DC motors and DC generators with an output power of ≤750W in the first half of the year were the largest single product exported by my country's motors, with an export value of 1.87 billion US dollars, a year-on-year increase of 4.1%. Other single-phase AC motors, with an export value of about 1.49 billion US dollars, a year-on-year increase of 4.5%, ranking second. Other motors with output power ≤ 37.5W, the export value was 1.15 billion US dollars, a year-on-year increase of 4.0%, ranking third.

(Data: China Customs Tabulation: Electrician Branch)

02

In the first half of the year, my country's motor exports faced new challenges

(1) The price of sea freight increased due to the conflict between Russia and Ukraine; the RMB appreciated and profits shrank.

In the first half of 2022, Europe will be one of the markets with the fastest growth rate for my motor exports. However, the Russia-Ukraine war affected the normal operation of European logistics, causing rising logistics costs, port congestion, and increased

dramatic inflation. According to German media reports, due to the impact of the new crown epidemic and the Russia-Ukraine conflict, cargo accumulation has occurred in many German ports. A dozen cargo ships scheduled to call at the ports of Hamburg or Bremerhaven now have to wait days or even weeks to dock. Shipping prices have more than doubled due to the war in Ukraine and the impact of the coronavirus pandemic. In addition, the RMB exchange rate fluctuates, and corporate profit margins are further reduced, and even face losses.

(2) Domestic and local epidemics lead to unstable supply chains, difficulties in exporting, and increased delivery risks

Since the beginning of this year, domestic local epidemics have repeatedly occurred, and raw materials, production, and employment have been restricted and hindered to varying degrees, leading to instability in the supply chain and increasing the risk of corporate order delivery. Affected by the epidemic, my country's copper price has skyrocketed since 2020, an increase of 88.9% from 39,150 yuan/ton on March 31, 2020 to 73,950 yuan/ton year-on-year. Although it will decline in 2022, it is still 60.0% higher than the 2020 price. According to research, due to the epidemic, some areas in the Pearl River Delta, Yangtze River Delta and other places have restricted work and reduced production to varying degrees. In addition, logistics in various places are not smooth, raw materials and auxiliary materials cannot be supplied in time, export goods cannot be loaded in time, and finished goods are backlogged. Warehouses, causing corporate liquidity constraints. The failure of some goods to be delivered as promised has also caused a breach of contract, and the company faces compensation losses.

(3) Foreign markets are gradually relaxing entry measures, and it is necessary to guard against the risk of order outflow

Since 2021, due to my country's effective domestic epidemic prevention and control measures, Chinese companies have received a large number of orders from neighboring countries, ushering in good results of exports reaching new highs. Since 2022, countries around the world have gradually relaxed entry measures, and foreign trade has gradually recovered. At the same time, problems such as poor supply chains and high prices for raw materials caused by repeated domestic epidemics have significantly reduced the willingness of foreign customers to place orders, affecting the production of the entire motor industry. For manufacturing and export, it is necessary to guard against the risk of outflow of domestic motor orders. The growth rate of motor exports in the first half of the year has been significantly lower than that of the same period last year. If the domestic epidemic and supply chain issues remain unresolved in the third quarter, the growth rate of my country's motor industry may continue to narrow, and corporate profits will continue to suffer.

03

Policy support and trend outlook

At present, the challenges faced by the export of the motor industry are problems that almost all foreign trade companies will face. On April 20, 2022, ten departments jointly issued the "Notice on Further Increasing Support for Export Tax Refunds and Promoting the Steady Development of Foreign Trade", focusing on policy relief and reducing the burden on export enterprises; convenient tax refunds, and efforts to improve the efficiency of capital flow; optimization business environment, and strive to promote the stable development of foreign trade.

In terms of industrial policy, on July 28, 2022, six ministries and commissions including the State Administration for Industry and Commerce issued the "Action Plan for Industrial Energy Efficiency Improvement" to implement actions to improve motor energy efficiency. Encourage motor manufacturers to carry out systematic innovative designs such as performance optimization, core efficiency, and chassis lightweighting, optimize motor control algorithms and control performance, and accelerate high-performance electromagnetic wires, rare earth permanent magnets, and high magnetic induction and low-loss cold-rolled silicon steel sheets. Innovation and upgrading of key materials. Promote energy-saving certification of motors and promote efficient remanufacturing of motors. Promote the use of enterprises to carry out equipment energy efficiency level and operation and maintenance assessment, scientifically subdivide the load characteristics and different working conditions, and accelerate the upgrading of motors. It is estimated that the proportion of new high-efficiency and energy-saving motors will reach more than 70% in 2025.

In terms of logistics policy, priority is given to the Yangtze River Delta, Guangdong-Hong Kong-Macao Greater Bay Area and other regions to jointly promote risk deployment and control, cargo supervision, and tax-paying enterprise management. Measures such as "Destination Inspection" facilitate enterprises to quickly pick up goods from ports, and help enterprises solve difficulties in the process of customs clearance of import and export goods.

In terms of ensuring the stability of the industrial chain and supply chain, a "green channel" for the import of important livelihood materials has been opened to ensure the import and export of key components and help maintain the stability and smoothness of the industrial chain and supply chain.

In terms of export tax rebates, a new measure of "three reductions, three additions, and three speed-ups" was launched this year, aiming to further improve the level of facilitation of export tax rebates. In terms of helping small and medium-sized enterprises to solve difficulties, increase credit insurance support, play the role of special funds, accelerate the development of digital trade, and connect domestic and foreign supply and marketing channels.

Under the background of the current domestic and foreign epidemic situation is still unclear, and issues such as shipping and raw materials are prominent, the Chinese government has issued various policies to stabilize foreign trade in a timely manner. Taking into account factors such as domestic epidemic prevention and control and enterprises' orders in hand, it is expected that exports will be made in the second half of 2022. The growth rate will be slightly higher than the export growth rate in the first half of the year, and the annual export growth will be about 10-12% year-on-year.