Tracking the ripple effects of US-China trade tensions
This week's chart pack covers the following topics:
China powers ahead in EV sales but faces slowing growth
Macrobond users can click here to access the chart and gain deeper insights into the data.
What the chart shows
This chart shows the monthly sales and year-over-year (YoY) growth trends of China's electric vehicles (EV), segmented into battery EVs and plug-in hybrid EVs. Fuel cell EVs, while included in the data, are not visible due to their low sales volumes. The upper pane shows absolute sales volume in millions, while the lower pane highlights YoY growth rates.
The chart aims to provide a view of the evolution of China’s EV market, including shifts in the contribution of different types of EVs to total sales and growth.
Behind the data
Despite international curbs on Chinese EV exports, driven by concerns about potential unfair advantages from government subsidies, domestic EV sales have continued to expand. The upper pane reveals that BEVs remain the biggest contributor to China’s EV sales volume, though PHEVs are playing an increasingly significant role. China's share of the global EV market has risen to 76%, reinforcing its position as a global leader in EV adoption.
However, the YoY growth rates have moderated over time, largely due to a slowdown in BEV sales, as the lower pane indicates. This deceleration reflects a maturing market and potential saturation in domestic demand for BEVs.
US reduces dependence on Chinese tungsten
Macrobond users can click here to access the chart and gain deeper insights into the data.
What the chart shows
This chart illustrates the shares of US tungsten imports by major supplier countries. It compares recent shares (12-month moving average as of August 2024) with those from three and five years ago, while also showing historical percentile ranges and median values for each country.
This chart aims to highlight shifts in the US’s tungsten import dependencies and its efforts to diversify suppliers over time.
Behind the data
Tungsten, also known as Wolfram, is a critical metal used in aerospace, defense and electronics applications, making it a strategic commodity in US-China trade relations. The US has historically relied heavily on China for its tungsten supply, creating potential supply chain security vulnerabilities.
Since the 2018 US-China trade war, the US has actively worked to diversify its tungsten imports. This effort is reflected in the chart, which shows declining import shares from China and rising contributions from alternative suppliers such as Canada and Germany.
Trade tensions have also influenced tungsten markets, with the US imposing tariffs on Chinese imports and China restricting tungsten exports to the US. A tungsten mine reopening in South Korea, reported to have secured a long-term supply contract with the US, could help alleviate the situation.
China's credit slowdown signals challenges ahead for EURUSD
Macrobond users can click here to access the chart and gain deeper insights into the data.
What the chart shows
This chart shows the YoY growth of EURUSD (dollar per euro) and China's 12-month rolling sum of total social financing (TSF), a broad measure used to capture the total amount of financing provided to the real economy that serves as a critical indicator of credit and liquidity conditions in the Chinese economy.
The relationship is further explored by detecting a six-month lead of China’s credit growth ahead of EURUSD, shaded in grey to indicate the 95% confidence interval based on China’s loan growth trends.
This chart aims to shed light on the interplay between China’s credit dynamics and the EURUSD exchange rate, offering insights into potential future movements in the currency pair.
Behind the data
China remains one of Europe's top trading partners, with China being the EU's third-largest export destination and the EU holding the largest trade deficit with the country. A strengthening Chinese economy could boost demand for European imports, potentially lifting EURUSD. However, current economic conditions in China introduce uncertainties.
This chart reveals a recent slowdown in China’s credit growth, with banks being the primary contributors while non-bank lending remains subdued. These developments may put downward pressure on EURUSD.
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