Electric Vehicles: West’s New Anti-China Battleground – OpEd
Consumers are finding the purchase of a car today as the latest economic battleground of the United States, Canada and some European Union (EU) countries in their effort to take down China.
In the last 15 years, China has risen to become the industry leader in the car and vehicle industry. This industry is next only to the health and life insurance industry in terms of global revenue.
However it is the leading one in respect to economic indicators of manufacturing, employment and profitability and plays a strategic role in the national economies of all leading developed nations. This can be seen in the car industry’s growth in Japan and South Korea which played a key role in their economic rise while the decline of the United Kingdom car industry has been a major contributory factor in its fall amongst leading manufacturing countries.
The global automobile market size in terms of revenue was worth around USD 2810.63 billion in 2022. The automobile market value is predicted to grow to around USD 3969.84 billion by 2030 with a compound annual growth rate of roughly 4.42% between 2023 and 2030.
Preparations for this battleground have already been put in place by the Biden administration in the electric vehicle (EV) sector. In mid May, Washington imposed tariffs against a wide range of hi-tech products from China. This included 100% tariffs on EVs and 25% tariffs on EV batteries. The US move – an unprecedentedly high quadruple increase – was followed by the EU’s announced provisional tariffs ranging from 17.4% to 38.1% on EVs imported from China in June. Canada has since followed the US and EU by its announcement of a 100% tariff on Chinese EV imports.
Background to Partisan Action Against China EVs
Since its earliest development, the car industry has been dominated by the internal combustion engine (ICE) with power provided by petroleum and diesel as its primary source. The recent development of electric engines providing an alternative to ICEs is generally agreed by all stakeholders and stake players in the industry and outside as a game changer in climate change and the objective of a less polluted and more sustainable world.
According to Earth.Org, a leading environmental news website providing coverage of crucial issues affecting our planet through independent, high-quality journalism:
“If all cars on the road became electric, we could cut almost one-fifth of global emissions. But the benefits of expanding the electric sector go beyond just this: besides being able to enjoy cleaner air, we would be less dependent on conflict-fuelled spikes in oil prices and we would have quieter cities.” – https://earth.org/electric-cars-environment/#
So why is it that China, the world’s leader in EVs and other areas of hi-tech and the green revolution is not lauded for its contribution to innovative transportation development and environmentally sustainable growth but instead is being penalised?
The reasons are clear but will be missing to anyone reading about this subject from official sources in Washington, Brussels and Ottawa. Firstly it should be emphasised that the high tariffs imposition given so much publicity in the international mass media is by a small minority of the 195 countries of the world. Even within the EU itself, although a dozen EU members voted in support of the tariffs, a majority of 15 voted against or abstained.
Secondly, the claim that China’s EV development has been an outcome of extensive subsidies, non-market practices and intentional state directed policy of over-capacity has little or no empirical data to back it up. Coincidentally but not unexpectedly, these claims have been reconfigured by Western media and other anti China interest lobbies to include China’s exploitation of cheap labour, stealing of intellectual property rights of other countries, copycat practices, etc.
What we are seeing with these EV accusations – as with those made about the ‘oppression’ of the Uyghurs in Xinjiang; the big brother omnipresence of an authoritarian CPC ‘repressing’ the lives of the Chinese population; and other similar accusations – is that they have no evidence; and whatever “evidence” presented has been exposed as made up or deliberately misrepresented.
The Chinese response has been to denounce the tariff increase as acts of protectionism and a disregard of World Trade Organization (WTO) rules, and the warning that it would undertake retaliatory measures in response.
Independent analysts have pointed out that China’s dominance of the EV industry and the new energy industry, including lithium batteries and photovoltaic products, has been built on technical innovation, complete industrial and supply chains, and full market competition. It is an outcome of creativity, efficiency and comparative advantage; and not of subsidies or any other unfair trade practice.
What has also been missing from the official and media analysis is that China is presently the undisputed leader in robot industrial robot usage and this accounts for its ability to take on and out-compete the legacy car makers of the West and Japan.
The issue of subsidies and over capacity now in play to prevent affordable vehicles and other Chinese products from making inroads into Western markets not only reeks of hypocrisy. The incontestable fact is that there is no manufacturing sector of the West that
has not been a recipient of subsidies provided by past and current governments to advance their national industrial development and economies.
A recent cursory listing of recent subsidies provided by some leading Western nations to their own car vehicle industry turned out the following data
GM $57B US Subsidies https://geni.us/AJy1s8
Ford $40B US Subsidies https://geni.us/ps4r
Stellantis $20B US Subsidies https://geni.us/8EP2q
Toyota $6.6B US Subsidies https://geni.us/frEV
Tesla $3.3B US Subsidies https://geni.us/m38iOm
VW $3.9B US Subsidies https://geni.us/RaWTcw
$1.7B for GM, Stellantis https://geni.us/nYfLlGV
$15B for Stellantis https://geni.us/iWKxk$9.2B for Ford https://geni.us/Z0v3Q
$13.8B for Unproven EV Companies https://geni.us/h0JCEe $16.3B for VW https://geni.us/NxMIqY
$14B for Toyota https://geni.us/FTludz
(see list in “China is Dominating Innovation, Not Just EVs” in https://www.youtube.com/watch?v=aqhTRQ–x_Q)
It can also be pointed out that practically every ‘unfair’ practice that the Gang of Three is accusing China of in its industrial and manufacturing progress has been learnt or copied from the West.
The big difference today is that much of the new industrial and manufacturing production of China is in the renewable energy sector of solar, wind and electric vehicle technology that consumers need – at cheaper prices – for a more equal, cleaner and sustainable world.
Clearly this article is written by an advocate of the CCP. The author starts by dismissing the assertion that the rise of the EV industry in China is the product of intellectual property theft and state subsidies. He claims there is no evidence to support this assertion. I am under the impression there is a great deal of evidence to support this assertion.
The author then does a complete flip flop and declares that all countries provide their industries with state subsidies, so what’s wrong with China doing it!
The author completely ignores the over overriding reason why subsidies are being applied to Chinese made EVs. China is not a rule-based player in the field of international trade. For China, economic power is just another lever that can be pushed and pulled to advance their own political agenda. One only has to see how China has been supporting Russia in their invasion of Ukraine to understand this.
China’s list of using economic power as a political lever is long. Any country who dangerously exposes their economy to trade with China is compromising their own political independence.
If the useless and incompetent US cannot compete with China in the trade and industry on a fair level field, then it should just keep quiet and admit defeat like a true gentleman. Stop being a cry baby.
Mr Lee has made three allegations, all of them false: That the US is ‘incompetent and useless’, that trade with China is a ‘level field’ and that Americans should ‘admit defeat like a ‘true gentleman’ and ‘stop being a cry baby’.
Firstly, the Chinese model for economic growth was built on the American organizational and entrepreneurial business model. So, how has China been so successful if built on a useless and incompetent model?
Secondly, China does not practice trade on fair, level field! The Chinese government subsidizes manufacturing costs, giving them a pricing advantage, they further reduce costs via widespread intellectual property theft.
Thirdly, the western notion of being a gentleman is about humbly protecting the weak and politely but firmly opposing the bully. China gains advantage through not playing by the rules and thus becoming a bully. The true gentleman will not ‘keep quiet and admit defeat’ to such a bully.