I want a level playing field/market competition. Allowing China's illegal subsidies and anti-market tactics to dominate the global EV industry is very dangerous, which is why they are already countervailed in many developed countries.
Subsidies aren't necessarily bad, but it's become China's choice of blunt instrument to price out/drive out foreign competition.
Subsidies are not the reason why China's EVs are cheap. The reason is that China has a much more competitive EV market than the US or EU. There are many manufacturers that are competing with one another, the charging infrastructure is much better than in the West, and Chinese cities heavily discourage internal combustion engine vehicles.
> Subsidies aren't necessarily bad, but it's become China's choice of blunt instrument to price out/drive out foreign competition.
China specifically encouraged foreign car companies to enter its market, most recently Tesla (which has done very well in China). Allowing foreign car companies to compete in the Chinese market was a major part of China's strategy to improve its own domestic manufacturing.
Of course, they're also just good at building things since they do so much of it. And cheaper labor. Much better supply chain.
https://www.bcg.com/publications/2025/ev-strategies-in-us-eu...
https://www.scmp.com/economy/china-economy/article/3322666/c...
Not really, not much similarities between China and EU subsidies past 15 years. China's NEV subsidies are illegal because they are either conditioned on illegal tech transfer, local content requirement, or restrict market access. To give a high level view of the problems:
1) forced technology transfer/IP theft -- all foreign automakers/EV battery producers forced to give up IP to access China's market (and subsidies). This was litigated before the WTO by the EU in 2018 (see WT/DS549):
Hybrid in a Trade Squeeze, Keith Bradsher, Sept 5, 2011, NYT
... The Chinese government is refusing to let the Volt qualify for subsidies totaling up to $19,300 a car unless G.M. agrees to transfer the engineering secrets for one of the Volt’s three main technologies to a joint venture in China with a Chinese automaker, G.M. officials said.
Power Play, Trefor Moss, May 17, 2018, WSJ
... China requires auto makers to use batteries from one of its approved suppliers if they want to be cleared to mass-produce electric cars and plug-in hybrids and to qualify for subsidies. These suppliers are all Chinese, so such global leaders as South Korea’s LG Chem Ltd and Japan’s Panasonic Corp. are excluded.
... Foreign batteries aren’t officially banned in China, but auto executives say that since 2016 they have been warned by government officials that they must use Chinese batteries in their China-built cars, or face repercussions. That has forced them to spend millions of dollars to redesign cars to work with inferior Chinese batteries, they say.
... “We want to comply, and we have to comply,” said one executive with a foreign car maker. “There’s no other option.”
Why a Chinese Company Dominates Electric Car Batteries. Keith Bradsher and Michael Forsythe, Dec 22, 2021, NYT
The government soon said electric car buyers could get subsidies only if the battery was made by a Chinese company. G.M., which had not been notified of the rule, started shipping Buick Velite electric cars in 2016 with batteries made in China by LG, a South Korean company.
Angry consumers and dealers complained that local officials were denying them subsidies, people familiar with the episode said. G.M. switched heavily to CATL for the huge Chinese market.
Why a Chinese Company Dominates Electric Car Batteries.
... A rival had released a video suggesting that a technology used by the company, CATL, and other manufacturers could cause car fires. Imitating a Chinese government safety test, the rival had driven a nail through a battery cell, one of many in a typical electric car battery. The cell exploded in a fireball.
Chinese officials took swift action — by dropping the nail test, according to documents reviewed by The New York Times. The new regulation, released two months later, listed who had drafted it: First on the list, ahead of the government’s own vehicle testing agency, was CATL.
As of this week, EU has over 100+ countervailing measures (anti-dumping/anti-subsidy) in force against Chinese imports, ranging from ceramic tiles (AD560), to decor paper (AD712), to polyester yarn (AD690); in addition to few more dozens of on-going investigations from candles (AD726) to hardwood plywood (AD717).
Your example of this is from 2011. Chinese joint venture / technology transfer requirements in the automobile sector were eliminated several years ago.
This was a policy that was enacted when China first opened up. It was a fair deal: foreign companies got to exploit cheap Chinese labor, and in return, they transferred some IP to China. However, that IP transfer was never enough to make Chinese cars internationally competitive. Only the development of EVs - where China is the biggest R&D spender in the world - allowed China to leapfrog foreign manufacturers.
You also raise domestic component requirements to qualify for subsidies. The US does exactly the same thing.
> So these are very deliberately orchestrated mercantile policies to gain advantages with forced tech transfer, limited foreign competition, and subsidized overcapacity and export subsidies.
The problems with this explanation are:
1. China leads in EV R&D. Chalking up its dominance to theft of foreign IP doesn't make any sense.
2. China specifically invited Tesla to enter the country, and showered it with subsidies. As a result, Tesla has done very well in China. The foreign companies that are losing market share in China are the ones that missed the EV transition. VW dominated the Chinese auto market until just a few years ago. Now, it's heading to 0% market share. Why? It didn't focus on EVs.
3. China is not dumping its "excess capacity." Chinese companies are selling their cars in foreign markets at a substantial markup, and netting large profit margins in foreign markets. That's the opposite of how dumping works.
> As of this week, EU has over 100+ countervailing measures
This was a purely political decision. Automobile manufacturers in France were scared of Chinese competition and demanded protectionist measures. The Germans opposed the measures, because they sell lots of things in China and don't want to get into a trade war. The French won that fight at the EU level.
In the US, it's implemented thru 19 U.S.C § 3571. The EU's foreign subsidies are regulated by Regulation (EU) 2016/1037 of the European Parliament and of the Council of 8 June 2016 based on the same WTO SCM Agreement.
While the WTO's regulations don't preclude local subsidy regulation, they must be consistent with the WTO's Agreement. In other word, any gov't subsidy favoring a "specific" company(ies) over domestic, foreign competitors, or distort market competition is an "actionable" offense and can be litigated before the WTO -- agriculture (quota based) and national security are however exempted. Others, such as export subsidies or local content requirement are prohibited under Article 3, "Prohibition" of the SCM.
That's your local political problem.