<h2>Core Viewpoints</h2>
In terms of contribution, the &#34;new three items&#34; products still provide considerable support for exports this year. The stable performance of cumulative export growth this year largely stems from the strong support of electromechanical products. In the first three quarters of this year, electromechanical products contributed 5.1 percentage points to exports, while the new three items contributed 2.5 percentage points, making the contribution of the new three items half that of electromechanical products. Although the new three items only account for 7.5% of the total electromechanical product exports, their contribution to the growth of electromechanical products is as high as about 50%. Considering the growth rate and contribution of the new three items, we believe that they still provide considerable support for exports this year.
In terms of driving force, the export growth of the new three items this year comes from the new energy vehicles category. According to our detailed breakdown, the rapid growth of exports of the new three items is mainly driven by the new energy vehicles category. 1) Among the new three items, the export growth of new energy vehicles is the fastest, achieving rapid growth, with the share of new energy vehicles in the new three items rising from 14% to 38%, becoming the core pillar of growth for the new three items. 2) Lithium-ion batteries have the highest share among the new three items, achieving both volume and price increases, although their share has slightly declined. 3) The export of photovoltaic products shows a trend of increasing volume but decreasing prices, with a significant decline in export share.
In terms of the market, although the exports of the new three items are mainly to Asia and Europe, the speed of entering the African market is rapid. As of the first three quarters of this year, China's exports of the new three items are still primarily to Europe and Asia, but a noteworthy change is the rapid pace at which the new three items are entering the African market. First, among China's exports to six continents, Africa is the only region where the share of all categories of new three items is increasing. Second, the growth rate of new three item categories in Africa is also relatively fast. Although the current export share to the African market is small, its rapid growth rate indicates that there may be significant potential in the African market. We believe that Africa may not only be a new blue ocean for China's exports of new three items but also an important position for laying out in emerging markets.
<h2>I. The Contribution of the New Three Items to Electromechanical Exports is Significant</h2>
This year, the stable performance of cumulative export growth largely stems from the strong support of electromechanical products. Since the beginning of this year, the export growth rate of electromechanical products has consistently exceeded the overall export growth rate, and is generally more than 2 percentage points higher than the total export growth rate. This strong growth provides key momentum for overall exports. From the perspective of share, as the largest category of China's exports, the high growth rate of electromechanical products undoubtedly plays a significant role in driving exports.
However, since electromechanical products encompass a wide range of categories, it is crucial to identify the core drivers through detailed segmentation, and the &#34;new three items&#34; are a key subset of categories.
The concept of the &#34;new three items&#34; was first formally proposed by the General Administration of Customs of China in a special report submitted to the State Council at the beginning of 2023. The new three items refer to new energy vehicles, lithium batteries, and photovoltaic products. However, the export data for the new three items has not been directly aggregated and needs to be summed up through the commodity codes published by the General Administration of Customs
From our aggregated data results, the export value of the new three categories of products in the first three quarters of this year amounted to USD 126 billion (Table 1), an increase of over 55% compared to the same period last year.
In terms of contribution, the new three categories contributed half as much to exports as electromechanical products. In the first three quarters of this year, electromechanical products contributed 5.1 percentage points to exports, while the new three categories contributed 2.5 percentage points, and the commodity codes of the new three categories are completely nested within the electromechanical product catalog. Although the new three categories only account for 7.5% of the total electromechanical product exports, their contribution to the growth of electromechanical products is as high as about 50%.
From the comparison of growth rates among major categories, the new three categories remain one of the highlights of China's foreign trade growth. As of September this year, cumulative exports increased by 6.1% year-on-year, with the growth rates of electromechanical products and high-tech products both exceeding the overall rate, while labor-intensive products represented by clothing and footwear showed weakened growth. The new three categories exhibited even higher growth rates, standing out among the main categories.
Considering the growth rate and contribution of the new three categories, we believe that the new three categories still provide significant support for exports this year.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/84fc5a03-75c1-48dd-aa6c-141599540061.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/84fc5a03-75c1-48dd-aa6c-141599540061.png"/><img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/0ec2377c-f35f-4fa8-a3bd-8cc8e95cdca4.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/0ec2377c-f35f-4fa8-a3bd-8cc8e95cdca4.png"/><img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/257be82e-0d21-4788-9237-ccdbbf69df98.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/257be82e-0d21-4788-9237-ccdbbf69df98.png"/>
<h2>II. The export growth momentum of the new three categories comes from the new energy vehicles</h2>
In the first three quarters of this year, the export year-on-year growth rate of the new three categories exceeded 55%, while the total export year-on-year growth of electromechanical products was 8.4%. The export growth rate of the new three categories is 6.6 times that of electromechanical products, and the main driving force behind this growth comes from new energy vehicles.
1) Among the new three categories, the export of new energy vehicles has grown the fastest, achieving rapid growth. In the first three quarters of this year, the export value increased threefold year-on-year. Consequently, the proportion of new energy vehicle exports in the new three categories surged from 14% to 38%, becoming the core pillar of growth for the new three categories.
2) Lithium-ion batteries have the highest proportion among the new three categories, but in the first three quarters of this year, their growth rate did not keep pace with the expansion of new energy vehicles, maintaining stable growth, making them the second fastest-growing category among the new three categories. Although lithium-ion batteries achieved simultaneous increases in volume and price, their proportion in the new three categories decreased from 54% to 44% due to the more rapid growth of new energy vehicle exports.
3) The export of photovoltaic products has declined significantly. In the first three quarters of this year, the export quantity of monocrystalline silicon and solar cells increased, but the export value still declined, indicating that their export prices may have fallen significantly, showing an overall trend of increased volume and decreased price, with their proportion dropping from 33% to 18%, weakening their weight
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/c6896fb2-ecf9-4da8-ae2a-cefb64b8168e.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/c6896fb2-ecf9-4da8-ae2a-cefb64b8168e.png"/><img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/723c9da4-fcec-447d-975e-356706a07e25.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/723c9da4-fcec-447d-975e-356706a07e25.png"/>
<h2>III. The Speed of the New Three Samples Entering the African Market is Rapid</h2>
From the perspective of market distribution, although the export of the New Three Samples is mainly to Asia and Europe, the speed of entering the African market is very fast.
As of the first three quarters of this year, China's export of the New Three Samples is still dominated by Europe (39.5%) and Asia (37.1%), which were also the main markets in the same period last year. However, a noteworthy change is that the speed of the New Three Samples entering the African market is very rapid.
First, among China's exports to six continents, Africa is the only region where the proportion of all categories of the New Three Samples is increasing. Among the six continents, due to factors such as trade policies, the proportion in North America and Latin America has declined. The overall proportion in Asia has rebounded, but some categories have also seen a decline. In Africa, the proportion of categories from photovoltaic products to new energy vehicles has increased to varying degrees. Among them, the proportion of solar cells has increased by 2 percentage points, and the proportion of new energy vehicles has doubled from the original proportion.
Second, the growth rate of the New Three Samples in Africa is also relatively fast. The current proportion of New Three Samples exports to Africa is 3.1%. Although this proportion seems relatively low, in fact, over the past year, this proportion has expanded by 0.6 percentage points. The growth rate of exports to Africa in both new energy vehicles and solar cells is relatively fast. This is consistent with our previously issued report &#34;After China's Share Shrinks, What Will Africa Rely On to Fill the Gap?&#34;, which pointed out that the main growth in exports to Africa this year is vehicles.
Although the current export proportion to the African market is small, its rapid growth rate indicates that the African market may have significant potential. We believe that Africa may not only be a new blue ocean for China's export of New Three Samples products but also an important position for laying out emerging markets.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/16a344c1-6b70-4ff7-bb01-5acc570f9d11.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/16a344c1-6b70-4ff7-bb01-5acc570f9d11.png"/><img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/19f9fdc4-5e60-4bb2-ae76-53f05d4d3cb8.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/19f9fdc4-5e60-4bb2-ae76-53f05d4d3cb8.png"/>
Macro Insights
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Since the beginning of this year, new energy vehicles, lithium batteries, and photovoltaic products have made significant contributions to China's exports. In the first three quarters, electromechanical products contributed 5.1 percentage points to exports, while the new three products contributed 2.5 percentage points. Exports of new energy vehicles grew the fastest, with their share of new three products exports rising from 14% to 38%. Lithium batteries had the highest share but saw a slight decline. The export volume of photovoltaic products increased while prices decreased. The new three products are mainly targeted at the Asia-Europe market, but the pace of entering the African market is accelerating, and the potential in the African market is significant

- The export growth of China's "new three types" products, including electric vehicles, lithium batteries, and photovoltaic products, significantly supports overall export stability, contributing 2.5 percentage points to the total.  
- The rapid growth in exports is primarily driven by electric vehicles, which have increased their share from 14% to 38% within the new three types.  
- Notably, while Asia and Europe remain the main markets, the new three types are quickly entering Africa, indicating potential for significant market expansion.

Xinda Jieyunliang: New energy vehicles, lithium batteries, and photovoltaic products have made significant contributions to exports this year