中国经济新三大动能：电池、电车、可再生能源.pdf

Policymakers and investors often refer to battery, new energy vehicle (NEV) andn

renewable energy as the “New Three” of the Chinese economy, in comparison

to the “Old Three” such as furniture, home appliance and clothing in Chinese

exports; or property, infrastructure and processing trade in the overall economy.

NEV and battery production, as well as renewable energy capex, have seen

significant increases in recent years and are expected to continue growing

rapidly in coming years, adding to headline GDP growth in China.

Leveraging the framework in our research on green capex, we investigate hown

Putting NEV, battery production and wind/solar power generation capex together,n

our analysis suggests that the “New Three” could only partially offset the drag

on growth from the property downcycle (including both through property

investment and upstream sectors, and also through real estate services, fiscal

and consumption channels). The likely impact on real GDP growth (from

expanding “New Three” but a shrinking property sector and declining traditional

vehicle production) is -0.5pp per year from 2023-2027 based on our estimates.

Based on our expectation of expanding “New Three” but a shrinking propertyn

sector and declining traditional vehicle production, the net impact on urban

employment will also be negative. Frictional unemployment will likely exist as

Goldman Sachs (Asia) L.L.C.

Xinquan Chen

+852-2978-2418 | xinquan.chen@gs.com

Goldman Sachs (Asia) L.L.C.

Hui Shan

+852-2978-6634 | hui.shan@gs.com

Goldman Sachs (Asia) L.L.C.

Lisheng Wang

+852-3966-4004 |

lisheng.wang@gs.com

Goldman Sachs (Asia) L.L.C.

Asia Economics Analyst

Sizing the “New Three” in the Chinese Economy

19 October 2023 | 6:04AM HKT

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Sizing the “New Three” in the Chinese Economy

property downcycles (including both through property investment and upstream

sectors, and also through real estate services, fiscal and consumption channels). The

impact on real GDP growth (from expanding “New Three” but a shrinking property

sector and declining traditional vehicle production) is -0.5pp per year from 2023-2027

based on our estimates, with the drag being most negative this year and fading

gradually towards -0.2 in 2027.

Although these sectors are often discussed together, the channels through which they

contribute to the Chinese economy differ somewhat. Renewable energy involves large

investment in wind and solar power generation, which mostly adds to GDP growth

through investment induced production across upstream sectors. NEV and battery

NEV production volume increased from 1 million units in 2018 to 6.7 million units in

2022. Although the share of GDP accounted for directly by activities of NEV production

is relatively small at less than 1% of GDP (our estimate of share in 2022), overall impact

on China’s GDP can be bigger if we count domestic economic activities embodied in

final demand for NEV production, which include sector activities such as battery

production and non-ferrous metals (e.g., copper and aluminum) smelting and pressing.

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The input structure of NEV production estimated by ERIA (Economic Research Institute

NEV production and domestic value-added in the rest of the economy embedded in the

final demand of NEV production using input-output analysis. Input-output analysis

illustrates the interdependencies between different economic sectors and industries.

Following the framework in our report

on green capex’s impact on the Chinese

economy, we map out NEV’s supply chains based on the NBS 2020 input-output (IO)

table. The 2020 IO table illustrates the linkages between 153 sectors in the Chinese

economy, and is the latest version of detailed IO tables published by the NBS. The ERIA

input structure for NEV production and the NBS IO table allow us to map each yuan of

NEV final demand proportionally into required activities from different sectors of the

after the initial investment stage of building out factories. The GS auto research team

expects net addition to NEV production capacity to be 2mn units in 2027, but total NEV

production to be around 18mn units in 2027 (vs 6.7mn units in 2022). In addition, the

average capex per unit of NEV production can be much smaller than the average cost of

goods sold per unit of NEV production. NEV production is therefore a much bigger and

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