China’s Export Dominance: What to Know – The New York Times

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From cars to solar panels to furniture, China is using lavish bank lending and enormous investments in robotics to cement its global leadership in manufacturing.

China’s car shipments to foreign markets have quintupled in the past four years. Its solar panels dominate global markets. Even exports in labor-intensive industries like furniture making, which China was once expected to lose to lower-wage countries, are surging.

American and European leaders have become increasingly vocal that a flood of Chinese exports is swamping their markets. Developing countries like India and Brazil are joining them in starting to put limits on purchases from China. Rich and poor countries alike fear that many of their factories may need to close, unable to compete with newer, more automated ones in China.

But China’s manufacturing sector is so strong that its export push will be difficult to counter. China already installs more factory robots than the rest of the world combined. China’s low-cost supply chains produce almost every imaginable part. And Xi Jinping, the country’s top leader, is pushing the country’s banks to lend more money for the construction of even more factories.

At the same time, Chinese companies are finding ways to bypass trade barriers in the West. They are breaking shipments into small parcels each worth little enough that they are exempt from tariffs. Chinese companies have increased exports to the West through indirect routes in Southeast Asia and Mexico, sidestepping tariffs on goods that come directly from China.

No category of China’s exports has attracted more attention than cars. In just four years, China has grown from an also-ran to become the world’s largest car exporter, with almost five million cars exported last year.

China’s electric car exports have grabbed the most attention, but three-quarters of its exported cars have gasoline engines. As electric cars have gobbled up market share in China, automakers have shipped their excess gasoline-powered cars to markets like Russia, where Chinese cars have captured more than half the market, and Mexico.

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