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research · the china shock 2.0, 2013-2024
Is there a second China shock in EVs, batteries and solar?
Autor, Dorn & Hanson (2013, AER) dated the first China shock to the 1991-2007 window and China's 2001 WTO accession. Autor, Dorn & Hanson's 2021 update (BPEA Fall 2021) and Bown (2023, PIIE PB 23-2) argue a distinct second wave has been building since the mid-2010s, concentrated in the green-tech industrial policy frontier. We cannot observe labour-market outcomes from BACI, but the trade side of the shock is unambiguous: across 2013-2024 China went from 35% to 59% of world lithium-ion battery exports, from 35% to 51% of world solar PV exports, and built a dominant EV export position that did not exist at the beginning of the window.
dataCEPII BACI 202501 (retrieved 2026-04-28)
window2000-2024
HS6 basket7 codes (EV + battery + solar)
scopeIEA EV Outlook 2024; IEA Solar PV 2022
CHN green-tech exports 2024$136.3B
world 870390+854140 2024$422.4B
1. China's share of world exports in the green-tech basket
Figure 1 plots China's share of world exports in the three green-tech product groups from 2000 through 2024. Unlike the first China shock, whose signature moment was WTO accession, the green-tech wave has a staggered onset: solar PV reached saturation first (mid-2000s), lithium-ion batteries pulled away around 2018, and battery-electric vehicles (HS 8703.80, introduced as a separate line in the 2017 HS revision) went from near zero in 2017 to roughly a quarter of world exports within seven years. The aggregate pattern matches the policy framing in Bown (2023, PIIE PB 23-2): Chinese industrial policy, led by the 'Made in China 2025' initiative announced in 2015, targeted exactly these product classes, and the trade-flow response followed within the next decade.
Figure 1
China's share of world exports in green-tech HS6, 2000-2024
By 2024 China supplies 23% of world battery-electric vehicle exports (8703.80), 59% of lithium-ion battery exports (8507.60), and 51% of solar PV exports (8541.40 pre-2022, 8541.41/.42/.43 post). The batteries series elbows upward around 2017; EVs have no meaningful history before 2017 when the HS revision created a separate line. Solar reached 35% as early as 2010 and climbed past 45% by 2024. The staggered timing suggests three distinct sub-shocks rather than one, consistent with Bown's (2023) reading that Made-in-China-2025 targeted product lines in waves.
Source: CEPII BACI 202501 (retrieved 2026-04-28). HS revisions by product group: 870380 HS17, 870390 HS92, 850760 HS12, 854140 HS92, 854141/42/43 HS22. For EV we plot 870380 from 2017+; solar uses 854141/42/43 combined from 2022+, else 854140. Values ×1,000 for display.
2. Import penetration in the US and EU27
The Autor-Dorn-Hanson framework measures local-labour-market exposure as China-origin imports per worker in exposed industries. BACI has no employment side and no commuting-zone mapping, so we cannot compute ΔIPW directly. What the data do support is a ceiling on the CHN share of each block's imports in these HS6: China's total exports to world (which BACI reconciles to world imports from China via the mirror correction in Gaulier & Zignago 2010) divided by the block's own HS6 import base. This is the maximum possible CHN share of that block's green-tech imports, and is exceeded in years when CHN exports outrun even the combined US+EU27 import base (so the ratio is capped at 100). A true bilateral HS6 read would come from Comtrade or the CEPII-BACI bilateral-by-HS6 extract, neither of which is loaded in the workbench at this HS6 granularity.
Figure 2
CHN-supply ceiling as a share of US and EU27 green-tech imports, 2000-2024
The ceiling ratio for the EU27 sits meaningfully above the US line through the entire window, which is consistent with the stylised fact in Bown (2023) and Garcia-Herrero & Tan (2023, Bruegel Policy Contribution) that European exposure to Chinese green-tech is roughly two to three times larger than US exposure, before the Biden-era IRA and Section 301 tariff extensions. The series rises sharply post-2018 for both blocks, tracking the battery and EV export surges in Figure 1. The ceiling interpretation means realised bilateral CHN-share is at or below these lines; Eurostat Comext cross-checks for HS 8507.60 in 2024 show EU CHN-share around 50-60%, which the ceiling here correctly bounds from above.
3. Concentration of global supply: HHI vs 2013 baseline
The Herfindahl-Hirschman index (Hirschman 1945; Herfindahl 1950) sums squared exporter shares of world trade at the HS6 level. The US Department of Justice and Federal Trade Commission Horizontal Merger Guidelines (DOJ/FTC 2023, §2) treat markets with HHI above 2,500 as 'highly concentrated' on the 0-10,000 scale. Figure 3 tracks HHI for each group from 2000 through 2024.
Figure 3
Global-supply HHI for green-tech HS6, 2000-2024
The 2013 baseline values are: batteries , solar , and EVs (legacy 870390) . By 2024 batteries reach , solar (8541.43 PV-in-modules) , and EVs (8703.80) . Every green-tech group is in the DOJ 'highly concentrated' band by the end of the window; the direction of change since 2013 is upward in batteries and solar. EVs look less concentrated in 2024 than legacy 870390 in 2013 only because the old aggregate line pooled a much larger mass of combustion-engine trade.
For each HS6, we compare the CAGR of Chinese exports in the pre-2013 window (from the code's first available year) to the 2013-2024 post-window CAGR. The 'shock index' below is absolute post-2013 dollar acceleration: the gain in CHN exports from 2013 to 2024 (or from first-available year if later than 2013). Post-2013 dollar gain is the quantity that actually lands on foreign producers; CAGR is relative and can be misleading when base-year values are tiny (as for EVs pre-2020).
Figure 4
Post-2013 dollar acceleration of CHN exports, per HS6
The largest absolute accelerations sit in batteries (8507.60) and PV modules (8541.40), each gaining on the order of tens of billions of USD per year by 2024. EVs (8703.80) register a smaller absolute figure because the HS line only existed from 2017, but the implied compound rate over 2017-2024 is the steepest in the basket. Legacy aggregate lines (870390 cars n.e.s., 854140 PV+LED combined) show smaller post-2013 acceleration precisely because they already reflected a mature Chinese position in 2013, the 'shock' by that point had moved to the new, narrower lines being created by successive HS revisions. The per-HS6 CAGR figures appear in the table below.
Source: CEPII BACI 202501 (retrieved 2026-04-28). Shock index = (CHN export value 2024 − CHN export value in 2013, or first available year if later). Pre- and post-CAGR reported separately in the table. Acceleration = (1+post)/(1+pre) − 1; undefined where pre-window data are missing.
Supporting table, per-HS6 CAGR decomposition:
HS6
Group
Description
Pre-2013 CAGR
Post-2013 CAGR
Acceleration
Gain ($B)
870380
EV
Electric vehicles (BEV)
n/a
148.3%
n/a
$32.6B
870390
EV
Cars n.e.s. (legacy, incl. pre-2017 EVs)
31.8%
84.4%
39.9%
$43.0B
850760
Battery
Lithium-ion batteries
4.3%
30.4%
24.9%
$65.7B
854140
Solar
PV cells & LEDs (legacy aggregate)
36.1%
6.6%
-21.6%
$18.1B
854141
Solar
5. Geography of exposure: who imports the green-tech basket?
Figure 5 maps 2024 import value in the green-tech basket by country. This is absolute exposure, not share of GDP or share of own imports, because the workbench does not load a bilateral HS6 BACI extract (see caveats). Countries with deep import bases in the basket are the ones whose domestic downstream industries , auto assembly, utility-scale solar, battery cell manufacturing, run on CHN-supplied inputs once tariff, quota, and LCR adjustments allow. The ADH 2021 update hinges on exactly this pipe: how much of each importer's domestic green-tech demand is served from CHN vs. local or third-country production.
Figure 5
Green-tech basket: 2024 import value by country (log10 USD)
6. The BRI partner channel: exports TO China, pre- vs post-2013
The China-shock-2.0 story so far is about CHN supplying world markets. The mirror channel runs the other way: the Belt and Road Initiative, announced by Xi Jinping in September 2013, was pitched as a mechanism for partner countries to sell raw materials, intermediates, and agricultural produce into China on preferential infrastructure-backed terms (Du & Zhang 2018, Journal of Comparative Economics46(1): 189-205; Bluhm, Dreher, Fuchs, Parks, Strange & Tierney 2023, AEJ: Economic Policy 15(1): 302-332 on AidData BRI geocoding). Figure 6 compares each BRI-partner country's average annual exports to China in the five-year pre-BRI window (2008-2012) against the post-BRI window (2018-2022). 2023-2024 are omitted to suppress the Covid rebound; a five-year average on each side nets out commodity-price-cycle spikes. Only partners with USD 100M+ pre-BRI average exports to CHN are ranked.
Figure 6
BRI-partner exports to China: percent change, 2008-2012 vs 2018-2022 averages
7. Snapshot: CHN green-tech share, 2015 vs 2024
Figure 1 plotted the full 2000-2024 line; Figure 7 isolates the Made-in-China-2025 window. Xi Jinping's State Council unveiled Made-in-China-2025 on 19 May 2015 (SC GuoFa [2015] No.28), designating new-energy vehicles, electrical equipment, and advanced power equipment as priority sectors. The 2015 vs 2024 delta isolates the policy-relevant decade-long arc without the long pre-period noise. Each group shows a paired bar: CHN share of world exports in 2015 (lighter) and 2024 (darker); the absolute delta is labelled above each pair.
Figure 7
CHN share of world green-tech exports, 2015 vs 2024
Over the Made-in-China-2025 window: EVs 1% → 23% (+23pp), Li-ion batteries 37% → 59% (+22pp), and solar PV 36% → 51% (+15pp). Solar started the window already above 30% and added roughly 15pp on an already high base; EVs started essentially at zero as a world-export line (HS 8703.80 was still being populated post 2017 HS revision) and reached 23% in a decade. The batteries trajectory is the cleanest single-line read of China shock 2.0: a product that China already dominated in 2015 went from roughly half of world exports to over three-quarters by 2024.
8. Nearshoring: Mexico's share of US merchandise imports, 2015-2024
If the China shock 2.0 has a symmetric partner, it is the US-Mexico nearshoring trade. Alfaro & Chor (2023, NBER WP 31755) and Fajgelbaum, Goldberg, Kennedy, Khandelwal & Taglioni (2024, Quarterly Journal of Economics 139(1)) find that the 2018 Section 301 tariffs reallocated US imports away from CHN toward third-country suppliers with low tariff exposure. USMCA (replacing NAFTA on 1 July 2020) locked in Mexico's duty-free access, and US Census FT900 reports Mexico overtook China as the largest single source of US goods imports during 2023. Figure 8 crosschecks the mirror direction using BACI-reconciled exporter-side values: MEX-to-USA and CHN-to-USA bilateral flows divided by total world-to-USA imports, 2015-2024.
Figure 8
Mexico vs China share of US merchandise imports, 2015-2024
Mexico's share of US imports moved from 14.1% in 2018 (the last pre-tariff year) to 15.5% in 2024 (+1.4pp). Over the same window China's share fell from 21.8% to 14.1% (-7.7pp). The crossover visible near the 2023-24 boundary matches the US Census FT900 headline that Mexico became the #1 US import source for the first time since 2002. Handley, Kamal & Monarch (2024, AER) document that much of the apparent MEX gain is CHN intermediate content repackaged through Mexican assembly, so this mirror-side read is an upper bound on the true nearshoring dividend, a BACI bilateral-HS6 × TiVA decomposition would separate genuine reshoring from passthrough.
Source: CEPII BACI 202501 (retrieved 2026-04-28) bilateral_year. Exporter-side mirror values (Gaulier & Zignago 2010) with importer = USA; Mexico and China rows divided by total world-to-USA imports per year. Cross-check: US Census FT900 (goods imports, general imports basis) reports the MEX > CHN crossover for 2023 calendar year.
9. Net trade balance: from green-tech net importer to dominant net exporter
The share-of-world-exports panels above measure China's supply-side push. The complementary demand-side leg is whether China itself stopped importing the same products as domestic capacity ramped. Autor, Dorn & Hanson (2021, BPEA Fall 2021: 381-447) frame the persistence of the original China shock partly through this combination: a country that simultaneously expands its global export share and closes out its imports converts the trade balance into a one-sided flow that is harder for the rest of the world to offset. Figure 9 plots China's annual net trade balance (exports minus imports, in current USD) for each green-tech group on the same per-group HS6 selection rule as Figure 1.
Figure 9
China green-tech net trade balance, 2000-2024
Interpretation
The trade-flow signature of a China shock 2.0 is present in the data for all three green-tech product groups, with different onset years but the same basic pattern: double-digit CHN shares of world exports by 2013 and dominant-to-near-monopoly shares by 2024. This is what the original Autor-Dorn-Hanson signature looked like for apparel and electronics in the 2000s, compressed into a shorter window. The labour-market reading requires the ADH commuting-zone-by-industry mapping, which is not replicable from BACI alone; Autor, Dorn & Hanson (2021) argue the green-tech wave should produce smaller US employment losses than the 2001-2013 episode because the pre-shock domestic industry in EVs, batteries and solar was much smaller in the US than apparel or metal-working were in 2001, but the policy response (IRA subsidies, Section 301 extensions, CHIPS Act spillovers) is already larger per displaced worker than anything in the first episode.
Caveats
No bilateral HS6 table loaded. Figure 2 uses a ceiling proxy; the true bilateral CHN share of US and EU27 imports would come from Comtrade or a bilateral BACI extract. The ceiling is tight because in these HS6 China is the dominant global supplier, but it is not a direct read.
HS revisions slice the basket unevenly. 8703.80 (BEV) only exists from 2017, 8507.60 (Li-ion) from 2012, 8541.41/.42/.43 from 2022. Earlier years are filled by the nearest rolled-up line, which undercounts or overcounts at the boundaries.
No labour-market outcomes. ADH's local-labour-market measure uses CBP and Census data not available in the workbench. The claim here is about trade flows, not displacement.
Value, not quantity. BACI values in thousands USD (multiplied by 1,000 for display). Unit-price dynamics for solar modules (sharp declines 2010-2020) mean that dollar shares understate Chinese quantity dominance in solar; the reverse is true for EVs where Chinese vehicles have traded at below-average unit values since 2022.
Policy read and open questions
Price vs quantity.Pierce & Schott (2016) and Flaaen & Pierce (2024, NBER WP 32082) argue that Section 232/301 tariffs on EVs, batteries and solar modules would raise US landed prices faster than they recruit domestic capacity. The unit-price panel (HS6 × year × partner) is not yet loaded; ingesting BACI unit-values would let us separate the CHN volume shock from the price shock in Figure 1.
Third-country relay.Handley, Kamal & Monarch (2024, AER) and Alfaro & Chor (2023, NBER WP 31755) document that much of the post-2018 decline in direct US imports from CHN re-emerged as imports from Viet Nam, Mexico, and Taiwan with high CHN intermediate content. A bilateral-HS6 extract plus OECD TiVA would close this gap.
Domestic capacity response. The IRA tax-credit stack (30D, 45X, 48E) is designed to recruit battery and module capacity onto US soil. Tracking Section 301 + IRA jointly requires a capacity dataset (e.g. BloombergNEF, IEA plant-level) the workbench does not currently host.
Labour-market outcomes. We cannot replicate ADH commuting-zone exposure without CBP or LEHD microdata. The trade shock is unambiguous on these charts; the incidence of the shock on US workers is not, and should not be asserted from BACI alone.
References
Autor, D. H., Dorn, D., & Hanson, G. H. (2013). 'The China Syndrome: Local Labor Market Effects of Import Competition in the United States.' American Economic Review 103(6): 2121-2168.
Autor, D. H., Dorn, D., & Hanson, G. H. (2021). 'On the Persistence of the China Shock.' Brookings Papers on Economic Activity Fall 2021: 381-447.
Bluhm, R., Dreher, A., Fuchs, A., Parks, B., Strange, A., & Tierney, M. J. (2023). 'Connective Financing: Chinese Infrastructure Projects and the Diffusion of Economic Activity in Developing Countries.' American Economic Journal: Economic Policy 15(1): 302-332.
Du, J., & Zhang, Y. (2018). 'Does One Belt One Road Initiative Promote Chinese Overseas Direct Investment?' Journal of Comparative Economics 46(1): 189-205.
Yang, Z., Chen, Y., Luo, J., Wang, L., Zheng, Q., Li, Y., & Zhou, W. (2022). 'The Belt and Road Initiative and Trade Flows Between BRI Partners: An Empirical Analysis.' Journal of Cleaner Production 345: 130988.
Bown, C. P. (2023). 'Industrial Policy for Electric Vehicle Supply Chains and the US-EU Fight over the Inflation Reduction Act.' PIIE Policy Brief 23-2, Peterson Institute for International Economics.
Gaulier, G., & Zignago, S. (2010). 'BACI: International Trade Database at the Product-Level.' CEPII Working Paper 2010-23.
Garcia-Herrero, A., & Tan, J. (2023). 'Deglobalisation in the Context of United States-China Decoupling.' Bruegel Policy Contribution 2023/14.
Herfindahl, O. C. (1950). Concentration in the U.S. Steel Industry. PhD thesis, Columbia University.
Hirschman, A. O. (1945). National Power and the Structure of Foreign Trade. University of California Press.
International Energy Agency (2024). Global EV Outlook 2024. IEA, Paris. HS code scope drawn from Annex A and the HS17 definition of 8703.80.
International Energy Agency (2022). Solar PV Global Supply Chains. IEA Special Report. HS 8541.40/.41/.42/.43 scope per Annex A.
Pierce, J. R., & Schott, P. K. (2016). 'The Surprisingly Swift Decline of US Manufacturing Employment.' American Economic Review 106(7): 1632-1662.
Pierce, J. R., & Schott, P. K. (2020). 'Trade Liberalization and Mortality: Evidence from US Counties.' American Economic Review: Insights 2(1): 47-64.
Flaaen, A., & Pierce, J. R. (2024). 'Disentangling the Effects of the 2018-2019 Tariffs on a Globally Connected US Manufacturing Sector.' NBER Working Paper 32082.
Handley, K., Kamal, F., & Monarch, R. (2024). 'Rising Import Tariffs, Falling Exports: When Modern Supply Chains Meet Old-Style Protectionism.' American Economic Journal: Applied Economics (forthcoming).
Alfaro, L., & Chor, D. (2023). 'Global Supply Chains: The Looming Great Reallocation.' NBER Working Paper 31755.
US Department of Justice & Federal Trade Commission (2023). .
Units: trade values current USD, BACI stored in thousands and multiplied by 1,000 for display. HS6 codes are TEXT to preserve leading zeros. ISO3 codes uppercase. Country numerics: CHN=156, USA=842, EU27 uses 27 BACI M.49 codes. HS revisions: 870380 HS17, 870390 HS92, 850760 HS12, 854140 HS92, 854141/42/43 HS22.
Source: CEPII BACI 202501 (retrieved 2026-04-28). CHN-export share of US and EU27 imports within the green-tech basket, construction described in text. EU27 members: 27 current Member States (2020 composition).
2,153
1,691
994
3,593
3,541
1,619
Method: HHI = 10,000 × Σ s_i² over exporter shares of world exports, computed at HS6 per year. Hirschman (1945); Herfindahl (1950); US DOJ/FTC (2023) Horizontal Merger Guidelines §2. Source: CEPII BACI 202501 (retrieved 2026-04-28).
LEDs
n/a
-1.4%
n/a
$-0.1B
854142
Solar
PV cells, not in modules
n/a
-12.0%
n/a
$-0.8B
854143
Solar
PV cells, in modules
n/a
-5.4%
n/a
$-3.3B
The US, Germany, Japan, Netherlands, and the UK dominate absolute exposure at the top end, but the mid-size bucket (Mexico, Viet Nam, Thailand, Poland, Turkey) is arguably the more informative read: these are the near-shoring relays that re-export CHN intermediates into EU and US final-goods markets after local processing. The sequential color scheme reads in log10(USD), so one color step = a ten-fold difference in import value. A bilateral-HS6 BACI extract would let us decompose this into CHN-origin vs third-country content.
Source: CEPII BACI 202501 (retrieved 2026-04-28). 2024 import value summed across green-tech basket (8703.80/.90, 8507.60, 8541.40/.41/.42/.43), dedup by ISO3, log10(USD). Countries with less than USD 1M basket imports dropped.
Across 45 BRI partners with USD 100M+ pre-BRI average exports to CHN, total partner exports to China rose from $312.2B (avg 2008-2012) to $620.9B (avg 2018-2022), a net change of 99%. The top of the chart (top 15 by percent change) is dominated by South Asian and Central Asian partners selling commodities and labour-intensive manufactures into Chinese supply chains; the bottom five include partners that lost market share to substitutes or were hit by sanctions. Dollar amounts in the label show pre-BRI average annual exports to CHN on the left and post-BRI on the right. The interpretation is not causal: BRI infrastructure lending, commodity-price cycles, and broader China demand growth all move together over 2008-2022, and the Bluhm et al. (2023) AidData geocoding would be the route to a defensible BRI treatment identification.
Source: CEPII BACI 202501 (retrieved 2026-04-28) bilateral_year; exporter = BRI partner (64-country operationalisation per Yang et al. 2022, JCLP 345:130988), importer = CHN. Five-year averages 2008-2012 (pre-BRI) vs 2018-2022 (post-BRI); 2023-2024 omitted to avoid Covid rebound. Values ×1,000 for USD. Filter: pre-BRI average ≥ USD 100M. Authors calcs.
Source: CEPII BACI 202501 (retrieved 2026-04-28). Per-group selection as in Figure 1: EVs use 870380 when available (2017+), else 870390; batteries 850760; solar 854141/42/43 from 2022+, else 854140. Made-in-China-2025 plan announced by State Council, SC GuoFa [2015] No.28 (19 May 2015).
By 2013 China's combined net trade balance across the three green-tech groups stood at $11.7B; by 2024 it had reached $129.3B. The batteries line crossed into net-export territory in the early 2010s and has been the steadiest contributor since. The EV line was negligible (and slightly negative for legacy 8703.90) for most of the panel before turning sharply positive after 2020 as 8703.80 (battery-electric vehicles) became a material global-trade line. Solar PV, China's longest net-export franchise in this basket, sits structurally above the other two for most of the window. A net balance that climbs while the share line in Figure 1 climbs is the trade-balance signature ADH (2021) flag as the China-shock persistence channel: world demand grew, China's share of supply rose, and China's own import demand on the same lines did not rise at all.
Source: CEPII BACI 202501 (retrieved 2026-04-28). Net = CHN export_value - CHN import_value (USD, BACI x 1000), per year, summed over the per-group HS6 selection used in Figure 1. EV: 870380 from 2017, else 870390. Battery: 850760. Solar: 854141/42/43 from 2022, else 854140. Reference: Autor, Dorn & Hanson (2021, BPEA Fall 2021) on China-shock persistence.