Mapping the rise of China’s autos and other global trade trends

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: John Letzing, Digital Editor, Strategic Intelligence, World Economic Forum, Minji Sung, Data Visuals and Content Specialist, Strategic Intelligence, World Economic Forum

• China was recently confirmed as the world’s biggest auto exporter.
• The growing global presence of its industry is one of the storylines captured in the Forum’s new series of trade-based Transformation Maps.
• Exporters of key car elements like rubber, chips, and lithium have increasingly linked up with China as a top importer over the years.

Aluminum’s a decent place to start. And not just because it begins with “a.”

It’s 1995. Bill Clinton is still in his first term as US president, and the country’s churning out nearly a fifth of the world’s aluminum. That begins to change, as producers try to cut energy costs. Destination: Iceland, land of cheap and carbon-free electricity.

Jump ahead a bit more than a quarter century. Iceland’s share of all aluminum flowing abroad has tripled, and the light metal accounts for about 40% of its exports. Much of that wends its way to Germany’s vaunted auto industry – which has increasingly sent its Volkswagens to China to satisfy growing demand, while vying with China’s own burgeoning production.

According to at least one set of data, what had long seemed inevitable recently came to pass: China was confirmed as the world’s biggest auto exporter. One of its domestic manufacturers became the largest single electric car maker as 2023 drew to a close; the company’s annual overseas sales rose by 334%.

China’s path to auto pre-eminence is one of many threads that can be traced through the Forum’s new series of trade-based Transformation Maps. They identify the top exports for 117 countries, and compare their prevalence and distribution to 1995 levels.

Aluminum currently takes a top export spot for 11 countries in addition to Iceland, at a time when demand is expected to surge by 40% in the near future (the Forum’s maps are based on data provided by the Observatory of Economic Complexity).

Still, aluminum doesn’t come without downsides. Some critics, including the Icelandic singer Björk, would prefer to see that country’s abundant renewable energy applied to something more environmentally-friendly than smelting (the maps connect exports to broader related topics, like the Future of the Environment). Others have said it helped trigger an unsustainable economic boom, in a place where traditional mainstay seafood still runs a close second in terms of export weight.

One thing seems clear: aluminum will be crucial for lighter, more efficient, and increasingly electric cars. Nearly 30% of the countries included in the maps that rely heavily on aluminum exports rank China as a top importer. For Chinese automakers, it’s just one of many essential materials.

There’s also the nickel that goes into batteries for China’s wide variety of electric models. Japan was first in line for Australia’s nickel, its sixth-biggest export charted in the map, back in 1995. Now, the biggest importer is China. Same for Chile’s abundant lithium, another electric car battery essential – much of that country’s “inorganic chemicals” (a map category that includes lithium) went to the US in 1995, well before China assumed the top spot.

Abundance can come at a cost. The Democratic Republic of the Congo is a major supplier of the cobalt used in electric car batteries (top importer: China). It’s also often described as suffering from a resulting resource curse. The number of listed exports for each Forum map depends on the complexity of that country’s economy, based on total trade volume – and the DRC has the minimum of four.

Pointing trade in a more sustainable direction

China’s auto industry also imports a lot of steel. Of the 32 countries included in the maps with iron and steel as a top export category, nearly half now link to China as a top destination.

Steel’s future value to an industry trying to find materials for more lightweight, zero-emission cars is up for debate. So is the best way to decarbonize its production.

Steel definitely showcases the power of trade agreements. Map users will be hard-pressed to find a European steel exporter with a top importer outside of the region; forming a common steel market was one of the EU’s founding principles.

An item not generally associated with Europe is natural rubber, though it’s yet another essential ingredient for China’s fast-growing auto industry. Demand tied to expanding Chinese production of electric cars recently helped push prices of the commodity to a three-year high. Its biggest exporters, like Thailand and Indonesia, have rosters of top rubber importers that include not just China but other major car producers including Japan, the US, and South Korea.

Any new car assembled in these countries likely includes thousands of semiconductors, and potentially double that amount if it’s electric. China recently began an effort to set its own standards for chips used in electric and self-driving cars, as part of a bid to rely more on domestic supplies. In the meantime, its auto sector leans heavily on imports.

An analysis published last year estimated that just 5% of the chips in Chinese cars were being made domestically. Twenty-two of the 55 countries in the maps (not named China) have a top export category that includes chips and links to China as a top importer.

At least by some measures, China’s car exports now dominate. Image: World Economic Forum

It’s more closely associated with car use than production, but oil also marks a conspicuous trail throughout the maps. Nearly two-thirds of the countries included still count oil, gas and coal as a top export category – even as we’ve started recording unnerving, emissions-induced levels of global warming.

When it comes to transportation-related emissions, electricity presents a way out. China has ramped up electric car production in a way that’s flattened prices to a point where some models cost the equivalent of about $11,000, or even less.

Of course, trade don’t necessarily follow a linear path. Companies can set up shop abroad to make their wares, then ship them to points elsewhere. Many of the electric cars exported from China are actually locally made Teslas, a US brand, liable to make their way back to North America.

This pursuit of efficiency can draw criticism as self-defeating. Making the financial numbers work doesn’t mean everything behind them is solved, and failing to account for that can feed anger and populism.

The current US president, for example, won the last election in 509 counties accounting for 71% of the country’s economic activity. His defeated populist opponent won in five times as many counties, yet they only accounted for 29% of activity. A rematch now seems likely.

That brings us back to aluminum. One of the last major smelters in the US, responsible for about a fifth of its total production, said recently it would curtail operations. The coal-powered plant had re-started several years earlier on the back of protective aluminum tariffs, designed to restore the sort of manufacturing jobs that have vanished in much of the country.

The smelter’s fate may be evidence that protectionism designed to replicate the past isn’t a winning formula. Making an effort to focus on trade in things that make sense for the future, on the other hand – aluminum made using clean energy, or electric cars – could be.

More reading on global trade and China’s auto industry

For more context, here are links to further reading from the World Economic Forum’s Strategic Intelligence platform:

• This reviewer couldn’t travel to test drive one of China’s cheapest electric cars, so he simply bought one online and had it delivered in a box; it’s “at the bottom of a deliriously varied electric-car market in China that should make Americans feel deeply jealous.” (The Atlantic)

• A surge in the manufacturing of electric cars, batteries, and solar panels made clean energy the biggest driver of China’s economic growth last year, according to this analysis. (Eco-Business)

• “That’s assault, not leadership.” This piece argues that in the US, at least, efforts to encourage electric car buying seem to be increasingly undermined by a lack of infrastructure. (Project Syndicate)

• Those lithium imports for electric car batteries may not be necessary at some point; this piece details a potential replacement element that’s 1,000 times more abundant. (The Conversation)

• Bauxite, the ore from which aluminum is produced, is also abundant – so how can aluminum qualify as a “critical” material? This piece explains. (RUSI)

• Global trade in commodities can have serious local implications; according to this piece, every $10 shift in the price of iron ore has a $2.5 billion impact on Australia’s economy. (ASPI)

On the Strategic Intelligence platform, you can find the trade-based maps and hundreds of additional topics. You’ll need to register to view.