The Chinese Market Doesn't Care About US and EU Tariffs: A Buying Opportunity!

China is rapidly driving the transition to electric mobility, putting traditional manufacturers such as Volkswagen (ETR:VOWG_p) in Germany, as well as Stellantis (LON:0QXR) in France and Italy, under pressure. Anders Hove, a China expert, explains that the success is mainly due to the availability of low-priced electric cars, while in Europe and the US, they are significantly more expensive. The technological advantage of Chinese carmakers is based on economies of scale: high demand has driven down battery prices and production costs have been significantly reduced.
 
Advantage through competition and innovation
 
State subsidies play a role, but many funding models have been adopted from the West. China's competition and innovations are also strongly supported, and buyers benefit from overproduction and competitive pressure. In addition, the charging infrastructure has been rapidly expanded, making charging in China significantly easier and faster than in Europe.
 
Different mentality: e-cars not seen as valuable, but as electronic items
 
Hove emphasises that Chinese consumers tend to see cars as short-lived electronic products, which drives demand for innovative models. National pride is also playing a growing role, while the environmental aspect is less important. Nevertheless, electric cars in China produce 40% less CO₂ over their life cycle than combustion engines, even in regions dependent on coal-fired power.
 
Hove sees opportunities for Western manufacturers if they focus on local production and innovation. However, more stable political support is crucial to further reduce costs and keep pace with China.
 
No matter how we look at it, the Chinese market will grow very strongly
 
Despite the EU's planned tariffs on the import of Chinese electric cars, the shares of Chinese car manufacturers are rising rapidly. Using the Hang Seng Index as an example, we can see that the Chinese market is following its own logic, which is becoming increasingly decoupled. We should not do the calculation without the Chinese.
 
Of course, we can be annoyed that China is making such a strong appearance, but we won't be able to stop it. Overproduction in China is putting increasing pressure on manufacturers to expand beyond the domestic market and continue to do everything they can to gain a foothold in Europe and the US. However, we can benefit from this. The market is free and we can buy any stock and any ETF we consider attractive. The next ETF we buy will probably be an ETF on the Hang Seng index, as well as shares in the manufacturers BYD and Xiaomi.
 

 
We saw it coming. For some time now, we have been writing to ourselves and pointing out that we live in a time when opportunities exceed risks. Contrary to all efforts to harm China, the Hang Seng index has quietly built up a base. We think that the index can defend it.
 
However, we expect a significant high shortly and thus a stronger correction. We will wait for this and then buy an ETF on this index at the bottom of the same.
 
Apart from that, we also expect that some stocks of German carmakers will soon form a bottom. We already have one stock in our portfolio. It couldn't be more exciting.
 
More opportunities than risks
 
No one should miss out on these great opportunities. In the last 30 days alone, we have made six purchases, all of which are already in the black. There will be more opportunities. Those who believe that the end of the year will be a downhill slide will be annoyed later on. It's easy to avoid: use our recommendations for your trading success. With the voucher code LIBERTY, you can now get up to 20% off all analysis packages.
 
Disclaimer/Risk warning:
The information provided here is for informational purposes only and does not constitute a recommendation to buy or sell. It should not be understood as an explicit or implicit assurance of a particular price development of the financial instruments mentioned or as a call to action. The purchase of securities involves risks that may lead to the total loss of the capital invested. The information provided does not replace expert investment advice tailored to individual needs. No liability or guarantee is assumed, either explicitly or implicitly, for the timeliness, accuracy, appropriateness or completeness of the information provided, nor for any financial losses. These are expressly not financial analyses, but journalistic texts. Readers who make investment decisions or carry out transactions based on the information provided here do so entirely at their own risk. The authors may hold securities of the companies/securities/shares discussed at the time of publication and therefore a conflict of interest may exist.