Page 150 - 2023 White Paper on the Business Environment in China
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3 White Paper on the Business Environment in China
their surroundings and make real-time driving the company with tens of thousands of unfinished
decisions without being subject to distractions, such vehicles it couldn't sell during the period. GM
as text messaging, that tempt humans. The value executives reaffirmed the auto maker's full-year
would also come from savings realized by fewer profit outlook, saying they expected production to
drivers as cities and enterprises replace passenger increase sharply in the second half as the computer-
vans and buses with shared autonomous vehicles. chip shortage eases, and that consumers continue
Already, significant progress has been made by to pay top dollar for new vehicles. GM's vehicle
both traditional automotive makers and AI players inventories remain extremely tight and there is no
to advance autonomous-driving capabilities to level sign that pent-up demand for new cars is waning
4 (where the driver doesn't need to pay attention after two years of tight dealership stocks. Pressure
but can take over controls) and level 5 (fully surfaced in other parts of GM’s business, too,
autonomous capabilities in which the inclusion of a including in China, the company’s second-largest
steering wheel is optional). For instance, WeRide, a market, where its joint-venture business posted
Chinese autonomous driving startup that achieved a rare loss of US$87 million. GM finance chief
level 4 autonomous-driving capabilities, completed Paul Jacobson blamed the China loss on Covid-19
a pilot of its Robotaxi in Guangzhou, Guangdong lockdowns and said the business is bouncing back.
province, with nearly 150,000 trips in one year from Ford also prepared to cut several thousand salaried
November 2019 to November 2020 without any jobs in North America to improve its cost structure
accidents with active liability (Li, Smart Growth). as it prepares for a long-term transition to electric
vehicles. Cathodes, however, use lithium, nickel
Parts Shortages and other materials that account for about 40
percent of the total cost of a battery. GM and other
At the onset of the Covid-19 pandemic, China's auto makers have been taking pains to disclose
strict “zero-Covid” policies managed to keep more to Wall Street about how they plan to put the
Covid-19 at bay. More than two years later, the industrial pieces in place to mass-produce electric
country's ongoing controls are still weighing down cars. Investor enthusiasm for EV-related stocks
its economy and stalling global supply chains. Steve soared in 2021 amid signs that battery-powered
Morrison, senior vice president at the Center for vehicles are poised for strong growth (Colias).
Strategic and International Studies, claims “Zero-
Covid has become one of the select drivers of global Intensified US-China tension over technology
recession.” The demanding quarantine and testing — and especially semiconductors — has shifted
rules have thwarted truckers on roads as well, electronics supply chains in slow but significant
driving up the amount of time it takes for goods to ways. Even corporate leaders who see the risk
get to Chinese ports for export. When it comes to of these tensions can't ignore more immediate
manufacturing, China has forced some companies policy changes driven by the US-China chip war.
to operate within a closed-loop system — similar The US continues to tighten its chip choke, rolling
to the “bubble” strategy — where factory workers out new restrictions limiting China's access to
live on-site. Companies such as Tesla and iPhone chipmaking software and equipment. Some
manufacturer Foxconn have had to implement foreign chip companies with facilities in China are
closed-loop systems. That’s not to mention the paying the price for failing to anticipate these new
poor weather, labor challenges and abnormal restrictions. SK Hynix, one of South Korea's two
demand patterns that have also added to supply major memory chip producers, is now restricted
chain disruptions. What supply chains thrive on from upgrading critical lithography equipment
is predictability. The only thing can be said about in its plant in Wuxi, China, which will prevent
China in 2022 was that for many businesses, China it from producing next generation chips there.
as being predictably unpredictable (Higgins-Dunn). Partly because of this, non-Chinese firms are
changing their investment patterns. Subsidies are
General Motors Co.'s (GM) net profit tumbled also changing the industry's structure. Attention
40 percent in the second quarter of 2022, hurt by has focused on recently passed US legislation
a loss in China and supply-chain troubles that left to incentivize semiconductor manufacturing,
leading TSMC and South Korea’s Samsung to build
150
their surroundings and make real-time driving the company with tens of thousands of unfinished
decisions without being subject to distractions, such vehicles it couldn't sell during the period. GM
as text messaging, that tempt humans. The value executives reaffirmed the auto maker's full-year
would also come from savings realized by fewer profit outlook, saying they expected production to
drivers as cities and enterprises replace passenger increase sharply in the second half as the computer-
vans and buses with shared autonomous vehicles. chip shortage eases, and that consumers continue
Already, significant progress has been made by to pay top dollar for new vehicles. GM's vehicle
both traditional automotive makers and AI players inventories remain extremely tight and there is no
to advance autonomous-driving capabilities to level sign that pent-up demand for new cars is waning
4 (where the driver doesn't need to pay attention after two years of tight dealership stocks. Pressure
but can take over controls) and level 5 (fully surfaced in other parts of GM’s business, too,
autonomous capabilities in which the inclusion of a including in China, the company’s second-largest
steering wheel is optional). For instance, WeRide, a market, where its joint-venture business posted
Chinese autonomous driving startup that achieved a rare loss of US$87 million. GM finance chief
level 4 autonomous-driving capabilities, completed Paul Jacobson blamed the China loss on Covid-19
a pilot of its Robotaxi in Guangzhou, Guangdong lockdowns and said the business is bouncing back.
province, with nearly 150,000 trips in one year from Ford also prepared to cut several thousand salaried
November 2019 to November 2020 without any jobs in North America to improve its cost structure
accidents with active liability (Li, Smart Growth). as it prepares for a long-term transition to electric
vehicles. Cathodes, however, use lithium, nickel
Parts Shortages and other materials that account for about 40
percent of the total cost of a battery. GM and other
At the onset of the Covid-19 pandemic, China's auto makers have been taking pains to disclose
strict “zero-Covid” policies managed to keep more to Wall Street about how they plan to put the
Covid-19 at bay. More than two years later, the industrial pieces in place to mass-produce electric
country's ongoing controls are still weighing down cars. Investor enthusiasm for EV-related stocks
its economy and stalling global supply chains. Steve soared in 2021 amid signs that battery-powered
Morrison, senior vice president at the Center for vehicles are poised for strong growth (Colias).
Strategic and International Studies, claims “Zero-
Covid has become one of the select drivers of global Intensified US-China tension over technology
recession.” The demanding quarantine and testing — and especially semiconductors — has shifted
rules have thwarted truckers on roads as well, electronics supply chains in slow but significant
driving up the amount of time it takes for goods to ways. Even corporate leaders who see the risk
get to Chinese ports for export. When it comes to of these tensions can't ignore more immediate
manufacturing, China has forced some companies policy changes driven by the US-China chip war.
to operate within a closed-loop system — similar The US continues to tighten its chip choke, rolling
to the “bubble” strategy — where factory workers out new restrictions limiting China's access to
live on-site. Companies such as Tesla and iPhone chipmaking software and equipment. Some
manufacturer Foxconn have had to implement foreign chip companies with facilities in China are
closed-loop systems. That’s not to mention the paying the price for failing to anticipate these new
poor weather, labor challenges and abnormal restrictions. SK Hynix, one of South Korea's two
demand patterns that have also added to supply major memory chip producers, is now restricted
chain disruptions. What supply chains thrive on from upgrading critical lithography equipment
is predictability. The only thing can be said about in its plant in Wuxi, China, which will prevent
China in 2022 was that for many businesses, China it from producing next generation chips there.
as being predictably unpredictable (Higgins-Dunn). Partly because of this, non-Chinese firms are
changing their investment patterns. Subsidies are
General Motors Co.'s (GM) net profit tumbled also changing the industry's structure. Attention
40 percent in the second quarter of 2022, hurt by has focused on recently passed US legislation
a loss in China and supply-chain troubles that left to incentivize semiconductor manufacturing,
leading TSMC and South Korea’s Samsung to build
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