Hello and welcome. You are listening to Patrick Boyle on Finance, a podcast exploring ideas from quantitative finance, examining events occurring in markets right now and financial history to see what lessons can be taken away, including interviews with some of the most interesting people in the world of finance. To learn more about the podcast, visit onfinance.org.

In a remarkably short period of time, China transformed from being a net importer of cars

to the largest exporter of finished cars by volume, outpacing automotive giants

like Germany and Japan. This rapid increase has startled trade partners who worry that cheap

foreign imports that are highly state subsidized could harm their economies, costing workers

their jobs and companies their market share.

The Chinese economy has been struggling in recent years.

Chinese exports based on the most recent data were 5.5% below the prior year's numbers.

But while overall exports are declining, quite the opposite is happening with automobiles.

In 2022, China overtook Germany as the world's second largest vehicle exporter, and last May

we learned that China had exported 1 million new vehicles in the first quarter of the year,

and had overtaken Japan in terms of

units, not dollars, as the world's biggest auto exporting nation.

In that quarter, Chinese auto exports were up 58% when compared to the same quarter

the prior year.

Japanese vehicle exports only grew 6% over the same period.

There are a number of reasons for this huge growth, which include increased demand for

electric cars, which China builds a lot of, sales of vehicles to Russia, who are under sanctions

from other countries, and Tesla's Shanghai

plant, which exports about half of the cars that they build in China to Japan and Europe.

The biggest part of this growth, however, has been homegrown brands like SAIC, BYD,

Gili and Cherry.

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