(Yicai) Nov. 13 -- China welcomes multinational companies in the automotive industry to help develop the global supply chain, according to Fu Bingfeng, executive vice president and secretary-general of the China Association of Automobile Manufacturers.

“China welcomes multinational enterprises to the country to build a new global supply chain system with us,” Fu said at the 2023 China Auto Supply Chain Conference held in Wuhan from Nov. 11 to 12.

“The automotive industry is highly globalized, and China’s automotive supply chain has also become deeply integrated into the globalization system,” he said.

China has been the global leader for auto production and sales for 14 straight years, and the large domestic market can support the world market, Fu said, noting that a strong Chinese supply chain is needed to guarantee a stable global supply chain. It also helps in terms of driving innovation in other regions, he said.

At a closed-door meeting the day before the conference, many foreign companies expressed an eagerness to benefit from China’s advantages and capabilities in the auto sector. Building a strong Chinese automotive supply chain means building a strong global supply chain, said Luo Junmin, the CAAM’s special deputy secretary-general.

China still has some shortcomings in the traditional vehicle supply chain, in areas such as chassis and power systems, Luo said in a research report on the country’s automotive supply chain released at the conference. 

China has notable advantages in the new energy vehicle sector, such as lithium iron phosphate and ternary lithium batteries, but also shortcomings in battery recycling, axle bearings at a high rotating speed, thermal management, and hydrogen fuel cells, he said.

The Yangtze River Delta region, and area that includes Shanghai along with the surrounding provinces of Jiangsu, Zhejiang, and Anhui, has the most developed auto industry clusters in the country, the report said, with 95 percent or more of traditional car parts and 90 percent of NEV parts produced locally.

But the region also has weaknesses in terms of high-end chips, operating systems and testing software, the report said. 

In the Greater Bay Area, a rapidly developing economic zone in southern China that encompasses several cities in Guangdong province and the special administrative regions of Hong Kong and Macau,  80 percent of traditional car parts and 45 percent of NEV parts are sourced locally, though the region lacks intelligent perception and control technologies, according to the report.

The industry clusters in the northeastern Beijing-Tianjin-Hebei region are mainly focused on research and development, with manufacturing mostly in other places. Industry clusters in the northeast and southwest of China have advantages in terms of traditional cars, the report noted.

Editor: Tom Litting