Volkswagen, the market leader in China, said on Friday that its production had been falling as the company faced an ever-worsening chip shortage and other supply chain issues. The company doesn’t have enough cars to fill customers’ and dealerships’ orders, creating a backlog.
“Our priority is to work off our backlog,” said Stephan Wöllenstein, the chief executive of Volkswagen’s China division.
For months, economists have made the same prediction: The fast growth of China’s exports cannot last.
The economists were wrong.
China’s exports kept surging through the third quarter and finished strong, up 28.1 percent in September from the same month last year. China posted its third-highest monthly trade surplus ever last month.
China has essentially maintained its strength in exports ever since its economy emerged from the pandemic in the spring of last year. As much of the world hunkered down at home, families splurged on consumer electronics, furniture, clothing and other goods that China manufactures in abundance.
The export boom, though, is creating another source of tension between the United States and China.
Katherine Tai, the United States trade representative, suggested in a speech two weeks ago that China’s export prowess was partly the result of subsidies and other unfair practices. “For too long, China’s lack of adherence to global trading norms has undercut the prosperity of Americans and others around the world,” she said.
But Chinese officials and experts contend that the country’s success is the result of a strong work ethic and consistent, large investments in manufacturing. They are quick to point out that by bringing the pandemic firmly under control within several weeks early last year, China was able to reopen its factories and offices quickly.