Notes on China
[WORK IN PROGRESS]
From the packaged garlic you buy to the solar panels on your roof, most physical products around you either are made/assembled in China or have a significant percentage of their supply chain there.
Recently, I started compiling a list of sectors they dominate. My hope is to convey to you the gravity of the situation by making you realize the breadth and scale of their industrial capacity. This is a work in progress and only covers a small fraction of the things they are really good at.
Tunnels
China has ~70% of the global market share for TBMs
MISC
- China’s CITIC Group has a contract to build and operate a $7.5 billion deep-sea port in Myanmar, taking a 70% share for 75 years. The port would let Yunnan trade directly while bypassing the Strait of Malacca. CITIC is also involved in a $1.3 billion port in Cameroon, along with mining, highway, and railway contracts there.
- COSCO owns 67% of Piraeus Port in Athens
- Eight of the 14 largest cobalt miners in Congo are now Chinese-owned
- Smithfield Foods is the biggest US pork producer. Its Sioux Falls, South Dakota pork processing plant accounts for 4% to 5% of US pork production. It is owned by China’s WH Group, the world's largest pork producer.
- China’s Sinochem is the largest shareholder in Italian tiremaker Pirelli
- Haifa’s port will be operated by Shanghai International Port Group from 2021 for 25 years
- CRRC is the world’s largest maker of locomotives. It is a Chinese state-owned company.
- H World Group is now larger than many major Western hotel chains by hotel count and loyalty membership. As of December, it operated 11,147 hotels with 1.08 million rooms and generated $3.3 billion in revenue last year. Its loyalty program has 267 million members, more than Marriott Bonvoy's 228 million. A key value driver is stored-value cards: prepaid cards customers use to book rooms and receive discounts.
- Transsion Holdings, owner of Tecno Mobile, is growing fast. It has sold over 200 million devices in Africa and now accounts for roughly 30% of the continent's mobile sales. A key value driver is its prepaid-focused model and its products' fit for local markets.
- Danyang, Jiangsu is China’s main spectacles production base, with nearly 1,000 manufacturers producing over 70% of China’s output and over 30% of global output. Shenzhen’s Henggang district separately produces about 80% of the world’s high-end spectacle frames, 85% of which are exported.
- Jinxiang produces 80 per cent of the world’s garlic exports. The US sources 80 per cent of all its fresh garlic imports from China. Chinese imports make up roughly 20 to 30 per cent of all garlic consumed in the US, according to the US and Chinese figures.
- The Simandou iron ore project in Guinea has begun commercial shipments to China. China sees it as a way to diversify beyond Australia and Brazil, which currently supply over 70% of its iron ore imports. At full output, Simandou could also require 150 additional Capesize bulk carriers, reshaping maritime logistics and giving Chinese carriers more leverage. (source)
Mining and Refining
- Serra Verde, a Brazilian rare earths mine backed by American investors, shows how much processing power China still controls. It is one of the only significant non-Asian sources of some hard-to-find rare earths, but nearly all of its output is contracted to China until at least 2027 because China is one of the few places able to process it. This is the real choke point: Brazil has the clay deposits, but the West still lacks enough separation and processing capacity.
Electric Cars
- LANGFANG, China, July 11 (Reuters) - Electric-powered heavy trucks are rapidly gaining market share in China, driven by subsidies and the quick rollout of chargers, further curbing diesel usage and denting oil demand from the world's biggest crude importer.
- China’s electric truck boom follows its electric car boom, as well as the recent rise of LNG-powered heavy trucks. Those factors, combined with slowing economic growth, have stifled its oil consumption growth.
- Just a few years ago, very few people drove electric vehicles in Nepal. Today, however, the majority of vehicles in Nepal are electric, putting the country at the vanguard of the shift to battery-powered mobility. India's long-standing dominance of Nepal's auto market has evaporated as Chinese carmakers have overtaken Indian brands to become the largest sellers of cars in Nepal.
- China is not just pushing sales of electric vehicles sharply higher. It is investing heavily in Nepal's electric public transport, particularly e-buses and charging stations. A slow rollout of charging stations hindered EV adoption in Nepal some years ago, but the number of charging stations is now growing rapidly along with demand for EVs.
- Meanwhile India, despite sharing both a border with Nepal and a history of strong cultural and political ties, has been left behind when it comes to EV sales in Nepal. Chinese brands like BYD, MG, and Xpeng are making big inroads into Nepal's auto market while Indian manufacturers struggle to maintain a foothold.
- Meanwhile India, despite sharing both a border with Nepal and a history of strong cultural and political ties, has been left behind when it comes to EV sales in Nepal. Chinese brands like BYD, MG, and Xpeng are making big inroads into Nepal's auto market while Indian manufacturers struggle to maintain a foothold.
- Luxury Food - China has surpassed Australia to become the second-biggest producer of macadamia nuts, accounting for more than one-fifth of global production.
- Kaluga Queen, a caviar brand developed by experts working for China’s agriculture ministry, is today the world’s largest supplier, producing 260 tonnes of the fish eggs in 2024 — 35 per cent of the global total.
- China is the world’s largest consumer of cherries and is projected to eat about 1.5mn tonnes this year, with 900,000 tonnes grown domestically and the rest imported largely from Chile.
- Growing cherries in temperate Midu has required both private ingenuity and state-built infrastructure. To replicate the cold winters that enable the trees to enter dormancy, Maani transports them into industrial cold storage. The facilities, which house about 10,000 trees, are powered by cheap electricity from a nearby wind farm. Local authorities also built pipelines to supply water.
- Kaluga Queen, a caviar brand developed by experts working for China’s agriculture ministry, is today the world’s largest supplier, producing 260 tonnes of the fish eggs in 2024 — 35 per cent of the global total.
- China produces about 70% of the world’s synthetic diamonds, and the machines used to make them are banned from export
- BYD's story and why they are so vertically integrated
Ships
- One shipyard made more ships in one year than the US did after World War II https://ustr.gov/sites/default/files/enforcement/301Investigations/USTRReportChinaTargetingMaritime.pdf
- https://www.csis.org/analysis/ship-wars-confronting-chinas-dual-use-shipbuilding-empire
- China’s shipbuilding rose from <5% of global tonnage (1999) to >50% (2023).
- Chinese interests own ~19% of the world's commercial fleet (Jan 2024).
- China supplies ~95% of containers, ~86% of intermodal chassis, and ~70–80% of ship-to-shore cranes (≈80% of U.S. cranes).
- https://www.uscc.gov/research/logink-risks-chinas-promotion-global-logistics-management-platform
Energy
- https://qz.com/china-electrostate-solar-panels
- Complete battery domination
- Complete Solar domination:
Airplanes
- COMAC's coming. Maybe not this decade, but they are coming.
- HANOI, March 13 (Reuters) - Vietnam's aviation regulator has proposed to recognise China's aircraft design certifications as equivalent to U.S. standards, facilitating the entry of jets from Chinese state-owned planemaker COMAC, according to documents seen by Reuters.
Biotech
- China is the global leader in API production and exports. It produces about 20% of the world’s APIs and exports around 40% of APIs traded globally, including key ingredients such as paracetamol. This is due to the low cost of utilities and greater government support. source
- Chinese company: Akeso Inc. is bringing a new treatment option for lung cancer to the US after a study showed its drug to be more effective than Merck & Co Inc.'s Keytruda. Keytruda generated almost $30 billion in revenue in 2024.
- Europe’s last manufacturer of ingredients for some vital antibiotics is closing its biggest domestic factory and shifting some production to China, dealing a blow to Brussels’ efforts to reduce drug dependence on Asia. https://www.ft.com/content/4b9684e4-72da-49e9-b11b-abe8a20b9507
- https://x.com/jrkelly/status/1965815924239528170
Machine Tools
There are some limiting factors to their growth, however
- Other countries really don’t like it when Chinese companies come into their markets and decimate their domestic champions
- The India-China-Russia alliance is very fragile