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China Becomes Largest Auto Exporter – Thanks to Sanctioned Russia

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China’s meteoric rise to become the world’s largest car exporter is a stark illustration of the complex interplay between global trade, geopolitics, and economic strategy. Amidst the backdrop of geopolitical strife and the formation of China’s new trade bloc, this development not only signals a shift in global economic dynamics but also reflects the shrewdness of Beijing’s industrial policies taking advantage of crises it instigated in the first place.

Previously, China’s automotive sector was largely focused on satisfying its colossal domestic market, with foreign carmakers playing a significant role. However, the current geopolitical landscape, particularly the fallout from the conflict in Ukraine, has led to a realignment of trade alliances and market dependencies. China has adeptly filled the vacuum left by Western carmakers’ exit from Russia, capitalizing on Moscow’s increasing reliance on Chinese products due to international sanctions.

This rise is not just a matter of increased sales figures or market dominance; it is emblematic of China’s ability to leverage international crises to its economic advantage. The surge in Chinese car exports, especially to Russia, signifies how global conflicts and trade wars can unexpectedly benefit certain nations while others struggle to maintain their footholds.

China’s strategy has not solely been about opportunism in times of global turmoil. There is a calculated and deliberate effort to diversify its automotive offerings, focusing not just on electric vehicles but also on traditional gas-powered cars. This approach has allowed Chinese automakers to exploit gaps in markets where there is still a strong demand for such vehicles, like Russia and Mexico.

The situation raises questions about the long-term implications of China’s newfound status as the top car exporter. While this signifies a remarkable achievement for Beijing’s industrial policies, it also highlights the precarious nature of global trade relationships. The U.S. and European Union’s protective measures against the influx of Chinese vehicles underscore the growing tensions and the delicate balance of international trade and competition.

Moreover, China’s next move, likely involving an increase in electric vehicle and hybrid exports, demonstrates its ambition to not just lead but dominate the global automotive market. This shift could have far-reaching consequences, potentially reshaping the automotive industry and altering global economic and geopolitical landscapes.

But China’s foray into the EV market has been perhaps less than successful than is perceived. Previous electric vehicle generations are piling up in graveyards, with spent batteries and no resale value.

https://www.bloomberg.com/features/2023-china-ev-graveyards/

It is a feature of communism and socialism that manufacturing does not improve to serve the customer very well. China has not become the world’s largest exporter of cars because its products are superior based on price and quality. If trade becomes more free again, China may find its customers longing for good old capitalist products that work much better and provide more bang for the buck.

In conclusion, this is a result of a strategy of coercion and massive movements to form the world into a trade bloc that serves China. And it is working.

This is not the first time this has happened, the world has formed and re-formed economically many times in the past. Perhaps it would not be so bad if China was not led by the Chinese Communist Party and its totalitarian, human rights averse, oppressive government.

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