Chen Xuehua, Deputy to the National People's Congress and Chairman of Huayou Cobalt: Multi-Dimensional Support for High-Quality Development of the New Energy Lithium Battery Industry

At the National Two Sessions, Chen Xuehua, a deputy to the National People's Congress and chairman of Huayou Cobalt (603799.SH), focused on the new energy lithium battery industry. He submitted 11 proposals covering areas such as the financial sector, capital markets, technological R&D in the lithium battery materials industry, green development, and encouraging private enterprises to create world-class companies.

Founded in 2002, Huayou Cobalt's business spans nickel, cobalt, and lithium resource development, green refining of non-ferrous metals, R&D and manufacturing of lithium battery materials, and resource recycling, forming an entire industry chain for new energy lithium battery materials. Currently, the company has established an operational layout encompassing overseas resources, international manufacturing, and global markets.

According to data from CAAM, in 2024, China's NEV sales reached 12.86 million units, accounting for over 70% of the global total and maintaining the top global position for ten consecutive years. Meanwhile, the market size of the upstream lithium battery materials sector in the NEV industry has also grown rapidly.

However, from the perspective of the entire industry chain, the domestic advantages of various lithium battery materials are mainly concentrated in downstream products and materials. In the upstream sector, especially in the treatment of by-products during lithium battery material production and the recycling of used power batteries, many issues remain unresolved, delaying China's lithium battery industry from transitioning from "product leadership" to "entire industry chain leadership."

"The lithium battery industry covers numerous industrial segments, and any lag in one segment could become a bottleneck restricting China's lithium battery industry from achieving 'entire industry chain leadership,'" Chen Xuehua told a reporter from Cailian Press. He noted that the lithium battery industry currently faces two major issues: increasing pressure in handling lithium battery by-products and inconsistent treatment processes in the lithium battery recycling sector.

Chen Xuehua suggested encouraging and guiding relevant enterprises in the lithium battery industry to intensify technological R&D through initiatives such as establishing major national science and technology projects. He proposed exploring greener production processes with lower raw and auxiliary material consumption and fewer by-products. Additionally, he recommended supporting capable lithium battery material companies in upgrading equipment and modifying production lines to reduce impurities in various lithium battery by-products under existing processes, thereby lowering the difficulty of reuse, enhancing reuse levels, and creating greater social value.

"The security of the energy metals supply chain is a critical link for the new energy lithium battery industry's leadership," Chen Xuehua emphasized. He pointed out that as the world's most influential metal exchange, the London Metal Exchange (LME), a wholly-owned subsidiary of the Hong Kong Stock Exchange, significantly impacts the global production and sales of non-ferrous metals through its trading prices and inventory fluctuations.

He stated that LME futures prices have become the primary market pricing benchmark for base metals like copper globally, and LME delivery warehouses are key factors influencing futures price trends. While China's consumption of base metals like copper accounts for over 50% of the global total, the country has yet to establish an LME delivery warehouse, which undoubtedly adds risks for enterprises. "Chinese enterprises have repeatedly faced 'short squeezes' by foreign capital in overseas markets, resulting in massive losses. A key issue is the difficulty for Chinese enterprises to organize spot cargo for delivery at LME-certified warehouses overseas within a short time frame."

Therefore, he suggested that relevant national departments collaborate with enterprises to accelerate the establishment of LME delivery warehouses in locations such as Shanghai and Ningbo. This would strengthen the security of China's metal supply chain, enhance its pricing power in international markets, and effectively improve the ability to ensure supply and stabilize prices.

On the topic of enterprises "going global," Chen Xuehua noted, "Currently, leading enterprises in the new energy lithium battery industry are accelerating their high-quality global expansion. However, traditional financial services can no longer meet the diversified financial needs of enterprises. At present, Zhejiang's overseas entities urgently need solutions in areas such as insurance coverage, banking support, and investment facilitation."

Currently, Chinese enterprises are accelerating their "go global" efforts. In 2024, Zhejiang Province alone had 385 private enterprises above a designated size (annual revenue exceeding 500 million yuan) with projects or branches overseas. These enterprises have footprints across the Belt and Road regions and major countries and regions worldwide, focusing on industries such as manufacturing, new energy, and pharmaceuticals, deeply integrating into the global industry and supply chain systems.

Chen Xuehua called on Chinese financial institutions to place greater emphasis on financial support for "going global" enterprises, strengthen the construction of cross-border financial service systems, and innovate cross-border financial products and services to safeguard Chinese enterprises' global expansion. He suggested that domestic insurance companies should increase underwriting support for Chinese enterprises "going global," with leading state-owned and central state-owned insurance companies taking the lead in raising underwriting shares and providing stable underwriting capacity. Over time, this would enable more Chinese-led projects to be insured by Chinese insurance companies. Additionally, he proposed developing products tailored to the financing needs of different types of "going global" enterprises, such as export credit, global credit facilities, merger and acquisition loans, and syndicated loans. Tools like cross-border RMB loans, overseas bond issuance, and cross-border cash pools could be utilized to help enterprises optimize fund allocation and support internationally competitive Chinese enterprises in building global industry chains.