When Chinese EV manufacturers pivot to the Global South
countries and especially to ASEAN with the USA and EU market closing up,
Japan will be the biggest loser. Chinese EV makers are setting up
factories in Thailand and Indonesia instead of the USA and EU. Japan
will have to compete tooth and nail with Chinese EV makers and will
suffer the same fate as in other sectors.
The car manufacturing
sector is Japan's last icon about to fall from its dizzying heights in
Industrialization. And it is all due to the USA and EU's actions against
China. The USA has managed to kill two silly birds with one stone -
de-industrializing the EU and crippling Japan. How much further is Japan
going to fall is left to be seen. Its fourth place in the Global GDP
ranking is not going to last.
South Korea took over the
electrical and electronics sector from Japan and was in turn
cannibalized by Chinese companies like Hisense, Xiaomi and TCL. South
Korea also took over the shipbuilding sector from Japan and now China
eclipsed the South Koreans in shipbuilding. China is taking over the car
making businesses from Japan and South Korea as well.
When
China wants to dominate a sector, it moves directly towards its goal,
and nothing is going to stop it. The USA thinks it is going to stop
China's semiconductor development priority by ganging up with Taiwan,
Japan and South Korea to do its dirty work. It is going to fail
miserably, with the latter three being dragged into the quagmire and
suffering the most collateral damage to come.
Anonymous
China will be selling EVs at the same price as those sold in USA and EU, but without the added tariffs. So, what difference does it make to EV manufacturers in China other than selling less to USA and EU, while selling more to the Global South countries in South America, Middle East and ASEAN plus Russia to make up, by cannibalizing the market share of traditional car makers from USA, EU, Japan and South Korea.
ReplyDeleteAfrica can always be cultivated to be an upcoming huge car market that China can leverage on, without fear of competition from USA, EU, Japanese or South Korean EV makers. The latter four countries are unable to compete on price, and price is the most important factor that consumers look for.
And what does that mean for aspiring car owners in USA and EU? Very expensive cars that, for a huge country like USA, the people cannot afford not to own a car to travel around. Just like in Malaysia, a family has to own a few cars to travel around. Without a car, it is just like having no legs, a crippled person, according to relatives living in Malaysia. Public transport is non-existent, even around Southern Johore.
But it is a choice that voters in USA have to live with. They do not understand what those tariffs are doing to them, thinking it is to hurt China. It is no more than an added tax on them. More than that, Trump, if he wins is promising tax cuts for corporate entities, which means again helping the rich further while punishing the poor. How is that going down with normal voters is interesting. Heads the elites and rich wins, tails the common people loses.
Not only that Russia is now the main market for Chinese EVs, EVs are the perfect cars for dusty conditions in the desert countries of the Middle East and Africa. No fear of sand and dust being sucked into the air intake compartment of ICE cars.
ReplyDeleteChina is also producing extremely affordable EVs specially for developing countries, including 3 wheelers and 2 wheelers, at prices no one can refuse...very affordable to people in developing countries.
China's electric bikes clobbered Japan's hydrogen fueled bikes. Who wants to buy hydrogen bikes, except in Japan perhaps, when refueling is a big problem.
ReplyDeleteMoreover, electric bikes have a big market in China and also in Vietnam where bike usage is so widely adopted. Where can Japan's hydrogen fueled bikes hope to find a big enough market to sell to?
There is no way the USA and the West can stop Chinese EVs or other products from dominating the market outside of the USA and EU. What steps they are taking is just punishing their own people in a world that had embraced globalization to benefit from products that can be produced with comparative advantages, and economies of scale, thereby resulting in cheaper and better goods.
ReplyDeleteSuch globalization moves have led to innovations to improve production techniques and cheaper products accruing to different countries. The USA and EU are killing their own industries and putting them forever uncompetitive. Please forget about subsidies, as the USA is the biggest culprit using subsidies to compete unfairly and stealing jobs from other countries like Germany, which is being de-industrialized by Biden using his 'inflation reductions act' and giving massive subsidies to, among others, the semi-conductor sector.
As I always say, the USA and EU are not the only market available to Chinese manufacturers for products such as EVs, solar panels, wind turbines, container terminal cranes, and other consumer products. There is a bigger market growing in the Global South that need all these products, and this is the market that China is more interested in going forward. When decoupling is complete, even in banking and the SWIFT system, we shall see the real damage that the USA has done to its own economy and that of the EU.
The USA and EU leaders never think beyond their long noses, and always get caught in their own web that they spun.