China's high-end manufacturing industry has made a record high contribution to going global in 2023 by riding the wind and breaking the waves

"Going abroad" is one of the key words for the development of Chinese enterprises at present. The 2024 government work report of the State Council will include "strengthening standard guidance and quality support, and creating more internationally influential 'Made in China' brands" as part of this year's work task.
High end manufacturing industry:
Over 70% of overseas contributions in 4 years
During the 2024 National People's Congress and Chinese People's Political Consultative Conference, several National People's Congress representatives provided suggestions and suggestions for the manufacturing industry to go global.
Xu Shilong, Chairman of Shanghai Lingang Group, suggested supporting private enterprises to go global, with a focus on supporting private enterprises with key core technologies to form leaders and play a driving role. Feng Xingya, General Manager of GAC Group, stated that the current international market has great potential and many opportunities. Self owned brand cars should firmly grasp these opportunities and regard internationalization as an extremely important new growth point for their next development. Lin Kaiwen, chairman of Shanghai Kaiquan Pump (Group) Co., Ltd., said that it would further guide small and medium-sized private manufacturing enterprises to "go global" and participate in the joint construction of the "the Belt and Road".
The export of manufacturing has become an inevitable trend in China's economic development. In recent years, with the support of national policies, China has transformed from a "manufacturing powerhouse" to a "manufacturing powerhouse". The export of high-end manufacturing has become an important engine for promoting the development of the manufacturing industry and an important lever to enhance the international influence of "Made in China".
According to public information, the high-end manufacturing industry mainly includes electronic information, equipment manufacturing, new materials, biopharmaceuticals, new energy, aviation manufacturing, etc. The corresponding industries of the China Securities Regulatory Commission include pharmaceutical manufacturing, general equipment manufacturing, specialized equipment manufacturing, automobile manufacturing, communication equipment, computer and other electronic equipment manufacturing, among others.
According to data from the National Bureau of Statistics, the export value of the nine major industries mentioned above (hereinafter referred to as "high-end manufacturing") reached 10.65 trillion yuan in 2023, which is basically the same as the previous year and accounts for 72.84% of the annual export delivery value. Since 2020, the contribution of high-end manufacturing to overseas markets has remained above 70% for four consecutive years, and this ratio reached a historic high in 2023.
Among the nine major industries mentioned above, electronic information, electrical equipment, and general equipment are the main force for going global. Among them, the export delivery value of communication equipment, computer and other electronic equipment manufacturing accounts for over 58% of the high-end manufacturing industry, but this ratio has dropped to the lowest level since 2007; The export delivery value of the electrical machinery and equipment manufacturing industry in 2023 accounted for 15.99%, reaching the highest level since 2012.
Automotive industry:
A new business card for high-end manufacturing going global
According to data from the General Administration of Customs, the "New Three Samples" (new energy vehicles, lithium batteries, and photovoltaics) continued to sell well overseas in 2023, with a total export value of 1.06 trillion yuan, breaking the trillion yuan mark for the first time, a year-on-year increase of 29.9%, fully demonstrating the strong resilience of the Chinese economy.
With the improvement of the upstream and downstream industrial chain and the increase of industrial technology maturity, China's automobile exports to the sea are becoming one of the important engines driving the growth of China's automobile production and sales and foreign trade. In 2023, the export delivery value of the automobile manufacturing industry was 811.34 billion yuan, a year-on-year increase of nearly 27%, ranking first among the nine major industries in terms of growth rate; The proportion of export delivery value to high-end manufacturing industry reached 7.62%, with both delivery value and proportion reaching historic highs.
According to data from the China Association of Automobile Manufacturers, China exported 4.91 million vehicles in 2023, surpassing Japan for the first time and becoming the world's largest exporter. From January to February this year, China's automobile exports reached 822000 units, a year-on-year increase of 30.5%. The China Association of Automobile Manufacturers predicts that China's automobile export sales will reach 5.5 million units in 2024, a year-on-year increase of 12%.
Chinese car companies led by SAIC, Chery, Great Wall, etc. are actively expanding their overseas product matrix. According to the company announcement, SAIC Group's overseas sales in 2023 were 1.208 million vehicles, with exports accounting for 24.06% of the annual sales, making a huge contribution to China's automobile export volume catching up with Japan; Chery Group's overseas sales reached 937100 vehicles, accounting for nearly 50% of the annual sales; Great Wall Motors sold 316000 units overseas. It is reported that Great Wall Motors plans to fully enter the European market. Following the German and British markets, Great Wall Motors plans to further expand to eight new European markets, including Italy, Spain, Portugal, the Netherlands, Belgium, Luxembourg, Austria, and Switzerland. Its exports are expected to reach new highs in 2024.
In 2023, Changan Automobile officially released its global "embracing all rivers" plan, constructing a "1+5+2" global development layout, forming the "four ones" overseas development goals, establishing five global business units, entering 12 new overseas markets, and expanding its business scope to 63 countries and regions worldwide. The company's cumulative overseas sales of independent brands reached 236000 units in 2023, a year-on-year increase of 39.23%.
BYD exported 242800 vehicles in 2023, a year-on-year increase of 334.2%; Last December, BYD officially announced the construction of a new energy vehicle production base in Hungary. This is an important step for BYD to expand its production capacity in Europe and even globally, which will help the company quickly increase its overseas market share.
Mid to High end Manufacturing Industry:
Opportunities for going abroad combined with domestic substitution
At present, China's high-end manufacturing industry is characterized by diversification and depth in its overseas expansion. Against the backdrop of global integration and prominent cost advantages, the export of manufacturing has become an inevitable trend. At the same time, there is also room for domestic substitution in the mid to high end industrial chain.
Guolian Securities stated that exporting domestic related products overseas is a new choice for the future. Donghai Securities pointed out that the prosperity of overseas markets such as North America is improving, coupled with the release of demand and the increase in consumer attention and destocking, China's high-end manufacturing market has broad prospects for going global.
Taking engineering equipment going to sea as an example, in recent years, the progress of excavators, bulldozers, cranes, and tractors going to sea has significantly accelerated. According to financial data from Tonghuashun, in 2023, China's excavator exports reached 191900 units and crane exports reached a new historical high of 20.1400 units, with crane exports increasing by over 200% year-on-year. Sany Heavy Industry, one of the leading domestic construction machinery companies, has already put into operation three major overseas intelligent manufacturing factories in Indonesia, India, and the United States.
Taking integrated circuits as an example, domestic substitution has accelerated the research and development and production of related industrial chains in China. Key technologies in domestic chip manufacturing have made continuous breakthroughs, and import dependence has decreased. According to data from the General Administration of Customs, China's trade deficit in integrated circuits has gradually narrowed. Since 2021, the growth rate of integrated circuit exports has continued to exceed that of imports. In 2023, China imported 479.56 billion integrated circuits, a year-on-year decrease of 10.8%, marking the lowest import volume in the past four years.
Listed companies:
Increased contribution of overseas revenue
From the perspective of A-share listed companies, the performance of manufacturing companies that have disclosed their 2023 annual reports overseas is full of highlights. According to Securities Times Data Treasure, the overseas business revenue of A-share high-end manufacturing companies has steadily increased from 0.93 trillion yuan in 2014 to 4.04 trillion yuan in 2022. At present, 20 companies have disclosed their overseas business revenue for 2023, totaling over 65 billion yuan, a year-on-year increase of over 20%.
From the perspective of the proportion of overseas revenue to revenue, the contribution of overseas business revenue (comparable data) of A-share high-end manufacturing companies has maintained an upward trend since 2014, reaching a historic high of 24.43% in 2022. The overseas business revenue of the 20 high-end manufacturing companies disclosed above has continued to increase since 2019, with a contribution of 31.9% in overseas revenue in 2023.
Specifically, in terms of individual companies, ZTE, Hengdian Dongci, and Senqilin ranked among the top three in overseas business revenue in 2023, with the top two companies both exceeding 10 billion yuan. Among them, ZTE's overseas scale has exceeded 30 billion yuan for more than 10 years, firmly ranking first in the communication industry. Hengdian Dongci's overseas business revenue reached a historic high in 2023, reaching 11.561 billion yuan. The company stated in its annual report that as of the end of 2023, it had established nearly 20 marketing centers and warehouses overseas, and its products had been sold to nearly 70 countries and regions worldwide. The company's brand influence overseas continued to increase.
From the perspective of overseas revenue contribution, six companies accounted for over 30% of their revenue in 2023, while companies such as Senqilin and Demingli mainly received their main revenue from overseas. Over the past five years, these two companies have consistently accounted for over 65% of their overseas revenue. In 2023, the proportion of Hengdian Dongci reached 58.63%, the highest level in the past five years.
The continuous breakthroughs made by manufacturing companies and the continuous expansion of high-end manufacturing industries, mainly focusing on "new three types", are due to their high emphasis on research and development.
Securities Times · Data Treasure uses A-share listed companies as a sample for statistics, and the research and development intensity (median of individual stocks) of manufacturing listed companies (in the China Securities Regulatory Commission industry) has remained stable at over 4%, far exceeding the overall domestic level for the whole year. The median R&D intensity of high-tech manufacturing industries, mainly in pharmaceutical manufacturing, aerospace, electronic information, and computers, continues to exceed the overall level of the manufacturing industry. In 2022, the median R&D intensity of high-tech manufacturing industry exceeded 8%, setting a new historical high. ZTE, with a scale of over 30 billion yuan overseas, has continuously increased its research and development intensity since 2017, surpassing 20% for the first time in 2023.
However, it should be noted that there are still many companies with low research and development intensity, mainly concentrated in the pharmaceutical manufacturing industry, computer industry, and aviation transportation industry.
Manufacturing going global
How to further break down barriers
The accelerated integration of digital technology and manufacturing industry presents considerable opportunities for China's high-end manufacturing industry. However, under the influence of cultural differences, geopolitical frictions, the transfer of industrial chains to Southeast Asia, and the recent ESG wave, the manufacturing industry still faces numerous challenges in going global. How to break down these barriers?
Hu Chengzhong, a representative of the National People's Congress and Chairman of the Board of Directors of Delixi Group, stated that firstly, as the industrial chain goes global, many enterprises have gone to different regions and industries around the world. They need to meet the compliance requirements of these different regions and industries, and have different adaptability to different market compliance requirements. They lack sufficient understanding of the complexity and uncertainty of global business, making it difficult to effectively sort out the development priorities and context, These greatly increase the cost and uncertainty of going out to sea; The second is that the export of the industrial chain requires sufficient guarantee of overseas talents. In some cases, it is still inconvenient for talents to apply for overseas visas, integrate into local culture, and live abroad; Thirdly, there are still certain inconveniences in terms of remittance, financing, and other aspects of the special funds for construction projects that are used for the export of industrial chains.
Wu Yulin, Director of Business Development for The Trade Desk in China, stated that "most Chinese companies that go global are still in the short-term sales stage and lack long-term brand building.".
Hu Chengzhong suggested increasing the sorting and introduction of authoritative information such as local business environment and industrial policies, and strengthening compliance guidance for relevant overseas enterprises; Provide more convenience in the process of talent settling in overseas Chinese enterprises; Under the premise of rigorous review of the nature and purpose of the enterprise's overseas funds, provide certain time and amount of convenience for the special funds necessary for the industry chain's overseas expansion.