Chinese metalworking fluids producers are following their automotive clients as they seek out new markets, especially those along China’s so-called Belt and Road Initiative, a major Chinese producer said at a recent industry conference.
China’s auto industry reach is growing rapidly throughout the world. Major Chinese carmakers such as BYD, Hozon Auto, Geely and state-owned SAIC and Wuling Motors are either building or have built manufacturing facilities in Malaysia, India, Indonesia and Thailand.
Xu Lishu, general manager of Guangzhou-based metalworking fluid supplier Fanchu Chemical, said at the conference that he’d learned two things from his trips to areas on the Belt and Road last year, including Russia, Central Asian countries and Southeastern Asian countries. “One is that Chinese products are in great demand in these countries,” he said. “And Chinese manufacturers have already been active in these markets.”
While Fanchu has yet to build facilities outside China, competitors have units in Vietnam and Indonesia. Dongguan, China-based supplier Amer built its first factory overseas in Vietnam in 2023 and a plant in Indonesia is to follow.
“These belt and road countries offer many opportunities to competitive Chinese manufacturers,” Xu said. “In several years we might edge out the Western competitors in these countries.” He added that emerging markets like North Africa and Latin America are also worth looking into because “many of our clients have built factories there.”
Xu’s comments came from a backdrop of China’s deteriorating economy, weakening domestic demand and geopolitical tension with the West, all of which are pushing Chinese metalworking fluid suppliers to look for opportunities overseas.
“We cannot survive if we only focus on the China market,” Xu said. “Even our clients are struggling for China growth.”
Before the conference, the Ministry of Commerce warned the country’s carmakers of the risks of investing overseas, especially India, Russia, Turkey and Thailand, Reuters reported.