Extraordinary significance, China surpasses Japan in this field Report | China | Significance

"China is expected to surpass South Korea in 2021 and Germany in 2022. At this pace, China is expected to surpass Japan by the end of 2023."

On the 15th, Consumer News and Business Channel cited a report released last week by Moody's Analytics, a subsidiary of international rating agency Moody's, stating that China is expected to surpass Japan and become the world's largest automobile exporter by the end of 2023.

Previously, China had surpassed South Korea and Germany to become the world's second largest exporter of automobiles. Since 2019, Japan has been occupying the crown of the world's largest automobile exporter. Nowadays, China's automobile sales are approaching Japan, with an average monthly difference of about 70000 vehicles between China's automobile exports and Japan in the second quarter, far lower than nearly 171000 vehicles in the same period last year.

"At this rate, China is expected to surpass Japan by the end of this year," wrote an economist at Moody's.

The Governor of Chang'an Street noticed that there is actually no need to wait until the end of the year. China has surpassed Japan for the first time in terms of automobile exports from January to June 2023, jumping to the world's first place.

According to the data compiled by the China Association of Automobile Manufacturers (CAAM) from the General Administration of Customs, the total export volume of Chinese automobiles in the first half of 2023 was 2.341 million, a year-on-year increase of 76.9%; The Japan Association of Automobile Manufacturers announced that the export volume of Japanese cars during the same period was 2.02 million units, a year-on-year increase of 17%. China has become the world's largest producer, consumer, and exporter of automobiles.

Moody's analysis points out that the Asia Pacific region is home to the world's largest automobile exporting countries such as Japan, China, and South Korea, but the recovery of automobile exports varies among countries. The overall export volume of automobiles in China has exceeded that before the epidemic, mainly due to the surge in demand for electric vehicles.

According to the data, electric vehicles accounted for nearly 30% of all global passenger vehicle sales last year, while before the outbreak of COVID-19, this proportion was less than 5%.

According to data from the International Energy Agency in April, global sales of electric vehicles exceeded 10 million in 2022, with China taking the lead, accounting for approximately 60% of the market.

In the first half of 2023, China's export revenue of electric vehicles doubled year-on-year. In contrast, overall car exports from Japan and Thailand have not yet returned to pre pandemic levels.

In addition, China has a competitive advantage in the production of lithium-ion batteries. According to Moody's analysis, due to the lower labor costs in China compared to Japan and South Korea, China's lithium production accounts for more than half of the global supply. Similarly, China's lithium refining capacity also accounts for half of the global market. These are all advantageous factors for Chinese automobile manufacturers in terms of electric vehicle production costs.

In recent years, some global automotive giants have set up production centers in China, such as Tesla and BMW. But Moody's also pointed out that foreign car companies clustering in the Chinese market have not overshadowed domestic Chinese car brands. "In fact, China's speed of applying new technologies in the automotive industry is unparalleled."

In addition to the automotive industry, the Governor of Chang'an Street noticed that since China's GDP exceeded Japan's in 2010, China has gone from being a follower to a leader in many fields.

In 2009, China's manufacturing industry surpassed Japan after decades of rapid development, becoming the world's largest manufacturing country. In the same year, China's trade volume surpassed Japan and became the world's largest commodity trading country.

According to the survey conducted by Nihon Keizai Shimbun in January this year, China has become the champion in the field of artificial intelligence research, and the quantity and quality of research papers are far more than that of the United States, which ranks second. However, Japan's global ranking has dropped from 6th place in a row from 2016 to 2019 to 9th place in 2021. In the future, China's leading momentum in artificial intelligence research will continue.

On June 8th this year, Forbes magazine released the 2023 "Global Top 2000 Enterprises" ranking. The list shows that in 2023, a total of 58 countries and regions have listed companies on the list. The United States ranks first with 611 companies, China ranks second with 391 companies, and Japan ranks third globally with 192 companies.

In addition, China has also achieved and maintained a leading position in the Internet, cloud computing, unmanned aerial vehicles, military equipment, household appliances and electronics industry brand shares and profits and other fields.

The Governor of Chang'an Street noticed that with the rapid development of national strength, many people may have become accustomed to the news that China has achieved world number one in various fields. But this time, the situation is different.

Automobiles are known as the "jewel on the crown of modern industry" and are the culmination of modern industrial technology. Becoming the largest exporter of automobiles proves the strength of China's manufacturing industry.

For Japan, the automotive industry is the country's largest economic pillar. The Harvard Business Review article points out that the financial condition of Japanese car companies is closely related to the overall economic performance of the country, and a severe recession in the automotive industry may have a chain reaction on the entire Japanese economy.

According to a report released by the Japan Association of Automobile Manufacturers in October 2022, the number of jobs directly related to the automotive industry in Japan in 2021 was 5.52 million, accounting for approximately 8.3% of the total workforce.

The international non-profit organization Climate Organization pointed out in its report that the international automotive market is rapidly shifting towards electric vehicles, while Japan is still highly concerned about hybrid vehicles. If Japan stubbornly holds its own views, its industry will be at a serious disadvantage. It is expected that by 2040, 1.72 million jobs will be lost, GDP will decline by 14%, and the automotive industry's profits will suffer a devastating blow, with losses estimated to reach up to 80 trillion yen.

The International Monetary Fund and the World Bank also expressed concerns about the decline of Japan's automotive industry. The International Monetary Fund stated in a recent report that the challenges faced by the industry pose significant risks to the overall growth and stability of the Japanese economy. The World Bank emphasizes that the decline of the industry may have a significant impact on Japan's employment and exports.

In addition, some Japanese car manufacturers are also "military factories" that produce military equipment. Mitsubishi produces fighter jets and missiles for the Japanese Self Defense Force, Subaru produces military helicopters, Kawasaki produces submarines, and Toyota produces military off-road vehicles called "giant cruisers".

On the 8th, Japanese media reported that following the release of the "Defense White Paper" and the joint air force exercise with Italy, the Japanese Ministry of Defense plans to apply for a defense budget for the 2024 fiscal year, exceeding 7 trillion yen, setting a new historical high, indicating a clear intention towards China.

According to previous reports from Reuters, the Japanese government hopes that Japanese industrial giants, including Mitsubishi, will increase their military equipment production. For these enterprises, this is another challenging task.