Supply-chain position taxonomy

Purpose. Methodology note defining the five supply-chain position families used in the Lens-2 figure and the case observations on the station page [1].

Data sources

Family assignments are computed from two tables: data/processed/case_card_hs6_decomposition.csv (HS6-level export deltas per cell, broken out by green-dictionary HS type) and data/processed/country_tech_quadrants.csv (per-cell capability, FDI signal, and trade-outcome metrics). Both are produced by the station pipeline [2].

Spine framing

China-HQ green FDI selects into different supply-chain positions, and the position determines what export growth signifies. The diagnostic question is not whether FDI worked, because that framing presupposes a single mechanism: capital arrives, plants get built, finished exports rise. The fifteen-cell evidence base contradicts that presupposition. The diagnostic question is which stage of the supply chain the FDI landed on, and which stage already existed before it arrived. Whether subsequent export growth counts as success is conditional on the answer.

Two lenses

The package combines two complementary diagnostics. Both are required; neither alone is sufficient. Lens 1, the readiness quadrant, asks where China-HQ FDI landed relative to pre-FDI capability and yields five labels via absolute floors (PC ≥ 0.10, capex ≥ $100m): Prepared Magnet, Untapped Candidate, FDI-First Experiment, Active (magnitude below or unknown), and Bypassed. Lens 2, the supply-chain position, asks what kind of capability appears in the 2017–2024 trade panel and yields the five families below. The two lenses can disagree; the disagreement is the finding.

Five family definitions

Finished-product export platform. Finished-product share ≥ 50% of the manufacturing-basket delta, and post-window factory-stage RCA ≥ 1.0. Finished-product HS codes are HS 850760 and HS 850780 for battery (lithium-ion and other accumulators) and HS 854140 for solar (photosensitive devices, which in HS17 nomenclature bundles PV cells/modules with LEDs; see Caveats).

Equipment / process-tools platform. Dominant HS type in the delta is Process Equipment, and finished-product share is below 30%. The exported capability is the machinery and intermediates used by other countries' downstream manufacturing: formation lines, wafer-handling and module-production equipment, quality-control and testing equipment.

Midstream materials / feedstock platform. Dominant HS type in the delta is Processed Material, and finished-product share is below 15%. Growth concentrates in processed chemicals or upgraded mineral inputs (nickel mattes, alumina, ammonia for PECVD silicon deposition, solar-glass polymers) supplied to other countries' downstream manufacturing. Some of these inputs are multi-use commodities rather than tech-specific feedstocks: alumina sits in six green-technology baskets and ammonia is a generic synthetic chemical, so processed-material growth can reflect general industrial or petrochemical expansion rather than green-value-chain entry. See Caveats.

Hybrid / relative-share case. No single HS type accounts for more than 40% of the basket delta, and factory-stage RCA declines over the window. Hybrid is a fallback family: assign Finished, Equipment, or Midstream first by dominant HS type and finished-product share. A negative RCA trajectory alone does not move a cell into Hybrid. USA/Solar and Saudi/Solar both have declining factory-stage RCA but their growth is dominated by Process Equipment and Processed Material respectively, so they remain in those families.

Vehicle and component export platform. Dominant HS type in the delta is Product Component, and finished-product share is below 50%. This is the EV family. The recipients enter the window with existing auto-industry bases, so growth is dominated by auto parts and drivetrain components rather than by newly created factory capacity, and the diagnostic within the family is finished-vehicle entry, not factory-base creation: the finished-product proxy is HS 870380 (battery-electric vehicles). The family carries two variants. Hungary, Mexico, and Thailand are established vehicle exporters with factory-stage RCA already above 1.0; Hungary (29.9%) and Mexico (34.0%) show real finished-vehicle entry while Thailand (4.7%) does not yet, its delta being dominated by multi-use integrated circuits (see Caveats). Brazil is the home-market variant: a large auto producer whose output is absorbed domestically (factory-stage RCA 0.19, a net finished-vehicle importer), where the China-HQ capital arrived to serve protected home demand and finished-vehicle exports are near zero. Indonesia's EV cell shares the home-market FDI story but is assigned to the midstream family because its trade delta is dominated by processed materials, not components.

Fifteen-cell assignment

Family distribution: three cells each in Finished and Equipment, four each in Midstream and Vehicle-and-component, one Hybrid.

Aggregate finding

One of the twenty-four FDI-First Experiment cells in the broader scored Solar + Battery panel crossed factory-stage RCA = 1 from below during the 2022–2024 trade window: KHM/Solar (0.04 → 2.83), which is US-tariff transshipment (mainland Chinese cell and module makers relocating final assembly to Cambodia to route around US antidumping and countervailing duties) rather than indigenous factory-stage capability. Of the other twenty-three, two ended the window above 1.0 (DEU/Battery 2.03 → 1.76; USA/Solar 1.27 → 1.07) but started above and declined; three more (ARE/Solar 1.41 → 0.97; USA/Battery 1.19 → 0.94; GBR/Battery 0.99 → 0.98) started near or above and dropped below; the remaining eighteen started and stayed below 1.0. The finding holds under the documented-exclusions screen, where the FDI-First universe is unchanged at twenty-four cells and the sole crossing is still the Cambodia transshipment case [3].

Caveats

The Solar finished-product proxy HS 854140 bundles PV cells and modules with LEDs in HS17 nomenclature. For Vietnam/Solar, LED contamination is small relative to known module output and the bucket is a defensible module proxy. For Malaysia/Solar, the LED component is material relative to PV, but the equipment-platform reading does not depend on the netting because the finished-product share (1.2%) is already an upper bound well below the family threshold. For Saudi/Solar the 854140 contribution rounds to zero.

Greenfield green-tech plants typically need two to four years from announcement to commercial output. The 2022–2024 trade post-window therefore mixes output from plants operating before the FDI window opened with early output from FDI-window plants that ramped quickly. Most FDI-First cells fall in the former case; the 2022–2024 trade numbers do not yet include meaningful output from the 2020–2024 announcements.

USA/Solar carries a negative finished-product share (−4.7%). Finished-module exports (HS 854140) declined in absolute terms while other Solar basket codes grew. Where this occurs, prose should report the negative share directly rather than absorbing it into a non-signed framing.

The vehicle-and-component family carries an EV-specific multi-use caveat. The EV basket has no green-dictionary tech, so its factory-stage RCA uses the basket's stored factory-stage cut, and it includes multi-use codes (four integrated-circuit codes, two semiconductor-equipment codes, generic instruments and castings) that carry trade far beyond electric vehicles. Where those codes dominate a delta the EV-specific read is not trustworthy: Thailand's basket delta is 54% multi-use integrated circuits shipped to the United States, so its 4.7% finished-vehicle share is reported as too-early rather than scored. This is the EV analogue of the multi-use-commodity caveat that governs the solar midstream cells.

The midstream-materials family is the most exposed to multi-use-commodity inflation. Indonesia/Solar (alumina 44.8% + ammonia 32.3% = 77.1% of the delta) and Saudi/Solar (ammonia 71.6%) concentrate their growth in commodities that are not governed by solar-specific industrial policy: Indonesia's aluminium ramp follows the general downstreaming (hilirisasi) mandate, and the solar local-content rule (TKDN) targets cell-to-module assembly, not aluminium. Indonesia/Battery is the contrast: nickel mattes (36.7%) and manganese (35.6%) are battery-relevant and are the explicit target of Indonesia's nickel-downstreaming policy. Public copy should read the solar midstream cells as commodity growth adjacent to the solar value chain, not as demonstrated solar entry. Trade data cannot observe end-use allocation, so this is a limit on interpretation, not a reclassification: the family assignment by dominant HS type is unchanged.

References

• [1] Station page: projects/nzipl/global-atlas/story-stations/china-green-fdi-readiness/index.html.
• [2] Pipeline: scripts/build_quadrants.py, scripts/build_case_card_evidence.py. Source basket definitions in data/processed/hs6_baskets.json. Trade source: BACI HS17 V202601.
• [3] sources/hq_classification_rule.md. Documents the exact-string-match HQ rule, the seven control-linked non-China-HQ firms, the Hong Kong-HQ Xinyi case, and cell-level sensitivity to the documented-exclusions screen.