Volkswagen, China’s market leader, said on Friday that the company was declining due to worsening chip shortages and other supply chain problems. The company does not have enough cars to fill customer and distributor orders, creating a backlog.
“Our priority is to do what we have to do later,” said Stephen Wellntin, CEO of Volkswagen China.
Gaining strength in the export business
Economists have been making similar predictions for months – China’s exports cannot sustain rapid growth.
Economists are wrong.
China’s exports grew by 28.1 percent in September compared to the same month last year as growth grew in the third quarter. China posted its third-highest monthly profit last month.
Since the outbreak of the economy last spring, China has maintained a strong export base. As much of the world is starving at home, families are flooded with electronics, home furnishings, clothing, and other commodities that China produces in abundance.
Export increases, however, are creating another source of tension between the United States and China.
In a speech two weeks ago, US Trade Representative Katherine Tai pointed out that China’s export efficiency is partly due to subsidies and other unfair practices. “China’s long-standing non-compliance with international trade rules has undermined the prosperity of Americans and others around the world,” he said.
But Chinese officials and experts argue that the country’s success is the result of strong work ethic and consistency, as well as large investments in manufacturing. They were quick to point out that China was able to open its factory and office quickly as it controlled the outbreak several weeks earlier last year.