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Free trade win-win for all, say auto execs

By Liu Yukun | China Daily | Updated: 2024-06-17 09:05

Employees work at an auto production facility in Jinhua, Zhejiang province, in April. [HU XIAOFEI/FOR CHINA DAILY]

During a recent meeting with Zhang Taixin, director of Zhejiang Huashuo Technology's Hungary branch, he adeptly switched between languages to communicate with his diverse team of Hungarian, German and Chinese staff. Despite their diverse cultural backgrounds, the team works harmoniously, epitomizing globalization within the automotive supply chain.

Ideally, businesses across different supply chain segments collaborate to advance the industry, enhancing technology, business models and application scenarios. However, ongoing trade frictions — often claimed to be protective measures for domestic enterprises — disrupt the global trade order.

Lin Boqiang, a professor at Xiamen University, attributes these measures to fears that strong Chinese companies might outcompete local businesses. However, even some industry leaders argue against such measures, saying they don't need such "protections".

BMW CEO Oliver Zipse and Volkswagen Chief Operating Officer Thomas Schafer have publicly opposed tariffs on Chinese electric vehicle imports, with the latter warning that such measures would backfire. Mercedes-Benz also voiced such concerns, with CEO Ola Kallenius publicly standing against trade restrictions.

The call is for Sino-European cooperation to create "win-win "outcomes.

Indeed, "win-win" is often cited in describing cooperation between Chinese and European suppliers. In a recent interview, SW Group's managing director Stefan Weber highlighted how their factories in Hungary and Mexico, established alongside Chinese enterprises, saw good performance.

Zhejiang Huashuo is one of SW's customers. "We leverage our global production capacity to address regional market imbalances, thus avoiding market fragmentation that does not serve manufacturers or consumers," Zhang said.

All businesses I interviewed agreed: profit drives their decisions. Whether through exports or international expansion, they follow customer demand.

Talking about the exact reasons why Zhejiang Huashuo established a factory in Hungary, Zhang further explained that "European clients prefer local manufacturing processes, prompting companies like us to engage in local research and development for quicker adaptation and collaborative design under European production standards. Establishing a European branch would help with efficient communication and local R&D, thus significantly enhance client collaboration."

He added: "Transporting large components like battery casings also poses logistical challenges. New energy vehicle makers want their suppliers to be close to their production sites to reduce logistics costs, improve efficiency and avoid uncertainties brought by trade conflicts."

Through this process, Chinese NEV parts makers have also introduced advanced technology and expertise globally.

"Our factory in Hungary has driven local industrial upgrades. Meeting our large demand helps local suppliers reduce production costs and foster local supply systems. Chinese manufacturers bring new experiences and capabilities to Europe, benefiting local businesses," Zhang said.

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