[DiogenesKynikos]

> forced technology transfer/IP theft

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.

[tooltalk]

> Your example of this is from 2011.

Sure, I'm giving you a chronological high level view of China's illegal practices past 15 years when China's NEV subsidies programs started.

> Chinese joint venture / technology transfer requirements in the automobile sector were eliminated several years ago.

This was never allowed and China upon China's 2001 Accession were required to phase them out 15 years ago, which China never did.

> You also raise domestic component requirements to qualify for subsidies. The US does exactly the same thing.

Sure, Biden's IRA passed in 2022 is a counter measure against China's domestic sourcing requirement since 2015.

> 1. China leads in EV R&D. Chalking up its dominance to theft of foreign IP doesn't make any sense.

False. Most, or close to 80% of all ACTIVE lithium ion battery patents are held by Japan and South Korea. The lithium ion battery industry was single-handledly created by Sony in Japan back in the early 1990's; quickly followed by South Korea. China was very late to the game and so far behind, which is why China forced tech transfer from Japan and South Korea since 2011 (see example #1) and effectively banned them in 2015 (example #2) -- still refuses to enforce IPR of foreigners, which isn't anything new. Japan + Korea in fact started going after the Chinese infringers only this year and in Europe -- already scored significant legal victories and sales injunctions in Germany. Many more coming and CATL isn't far in their legal pipelines.

> 2. China specifically invited Tesla to enter the country, and showered it with subsidies.

Sure, again Tesla is the only foreign automaker operating fully independently without forced tech transfer and other jazz in China. Tesla is an exception, not the norm. After EU filed WT/DS549, China promised to reform FIL and supposedly implemented in 2020/2021, but Tesla still remains the only foreign automaker without forced JV/tech transfer today.

> 3. That's the opposite of how dumping works.

Wrong again. That's exactly how dumping works and why there are over 6-7 dozens of anti-dumping measures against China in EU. Dumping doesn't depend on a markup or profit/loss, but on the undistorted "normal-value" born by market without gov't interference -- eg, price fixing or illegal subsidies.

> This was a purely political decision.

Again there are over 100+ ACTIVE anti-subsidies/dumping measures in force against China. It's just one of many and has been on EU's radar for 15 years.

[DiogenesKynikos]

> Sure, I'm giving you a chronological high level view of China's illegal practices past 15 years

The Chinese automobile industry in 2011 is hardly relevant to the EV industry in China today. The EV industry was not built by technology transfer requirements.

> This was never allowed

It was not only allowed, but actually viewed as a legitimate way for underdeveloped economies to develop.

> Sure, Biden's IRA passed in 2022 is a counter measure against China's domestic sourcing since 2015.

The US has all sorts of "Buy American" provisions and subsidies, going way back before 2022.

> False. Most, or close to 80% of all ACTIVE lithium ion battery patents are held by Japan and South Korea.

You're talking about the 1990s. I'm talking about now, 30 years later. The Chinese lead in battery technology and spend massive amounts of money on R&D.

> Sure, again Tesla is the only foreign automaker operating fully independently without forced tech transfer

Not true. First off, just as a footnote, there never was "forced technology transfer." Foreign companies knew what the regulations in China were and made a rational business decision to trade some amount of IP for access to cheap labor. Both sides benefited. But beyond that, nowadays, any foreign car company can operate in China without a local joint venture partner. Tesla was the first, but it's not the only one, and other companies are free to leave their joint ventures if they want to. Most of the large foreign automobile manufacturers in China have either acquired majority stakes in their China operations or have bought out their JV partners completely. This is the norm now.

> Wrong again. That's exactly how dumping works

No, dumping involves selling your products below the cost of manufacture in foreign markets. When you instead sell them at a substantial markup, that's called "making bank."

[tooltalk]

> The Chinese automobile industry in 2011 is hardly relevant to the EV industry in China today. The EV industry was not built by technology transfer requirements.

of course they are relevant and are built on tech transfer.

> It was not only allowed, but actually viewed as a legitimate way for underdeveloped economies to develop.

Again, this was illegal then and China was taken to the WTO in 2018 (WT/DS549 China — Certain Measures on the Transfer of Technology ) as I'd already explained (example #1).

> The US has all sorts of "Buy American" provisions and subsidies, going way back before 2022.

Sure, which EV or batteries before 2022?

> You're talking about the 1990s. I'm talking about now, 30 years later. The Chinese lead in battery technology and spend massive amounts of money on R&D.

Again, "ACTIVE" patents. Patents last just 20 years. Korea in particular have already dominated most automotive lithium ion battery patents 10-15 years. Again, this why is China forced tech transfer and "effectively" banned Japan + Korea battery makers when they realized their local "champions" still couldn't catch up or compete in 2015. China's obsession with LFP whose core patents expired last 3-4 years is likewise no coincidence and their "RECENT" investment in "post"-lithium ion batteries, such as sodium.

> Not true. First off, just as a footnote, there never was "forced technology transfer."

Again, see the WTO case WT/DS549 China — Certain Measures on the Transfer of Technology

> No, dumping involves selling your products below the cost of manufacture in foreign markets. When you instead sell them at a substantial markup, that's called "making bank."

Again this doesn't apply to China. China's "local price" or "cost of manufacture" is not considered a "normal value" as their entire supply-chain is distorted by gov't subsidies.

Europe's Basic Regulation (EU) 2016/1036 (anti-subsidy regulation) has specific provisions for non-market-economy countries -- ie China, Article 2(7a)

  In the case of imports from non-market-economy countries (6), the normal value shall be determined on the basis of the price or constructed value in a market economy third country, or the price from such a third country to other countries, including the Union, or, where those are not possible, on any other reasonable basis, including the price actually paid or payable in the Union for the like product, duly adjusted if necessary to include a reasonable profit margin.

[DiogenesKynikos]

> of course they are relevant and are built on tech transfer.

The small amount of technology transfer that happened in 2011 for internal combustion engines is not relevant to the EV industry in 2025. It wasn't even enough back then to make China competitive in internal combustion engines.

> Again, this was illegal then and China was taken to the WTO in 2018

No, technology transfer is not blanket banned by the WTO. It's actually encouraged for developing countries.

> Again, see the WTO case WT/DS549 China — Certain Measures on the Transfer of Technology

I don't think the WTO has ruled on that complaint.

> Sure, which EV or batteries before 2022?

The US faced virtually no competition for EV vehicles from China before 2022. The protectionist measures came up as soon as the competition appeared.

> Again, "ACTIVE" patents. Patents last just 20 years

You're really going to claim that China does not lead in current-day research? You're reaching back to decades ago, when that wasn't the case, to dismiss the massive Chinese R&D on batteries today.

> China's "local price" or "cost of manufacture" is not considered a "normal value" as their entire supply-chain is distorted by gov't subsidies.

Government subsidies are fairly small, and are paid to the consumer (not the producer), so they don't affect the cost of exported goods. Chinese companies are selling EVs in Europe at far, far higher prices than in China.

As I said, some EU countries are afraid of legitimate competition in EVs, because their own EV industry is hopelessly backwards. They're raising protectionist barriers, and coming up with a fig leaf to justify it.

[tooltalk]

> The small amount of technology transfer that happened in 2011..

Sure, China's tech transfer in BEV/hybrid/battery tech had been going on since 2011 and continued until fairly recently, not just in 2011 (read NYT article cited in example #1).

> No, technology transfer is not blanket banned by the WTO. It's actually encouraged for developing countries.

Wrong. That only applies to LDC, or Least Developed Countries under the TRIPS Agreement, GATT 1994. And we aren't exactly talking about high-tech EV/battery or semi-manufacturing tech, but better farming, irrigating, fertilizer techniques in countries like Bukina Faso, Angola, or Haiti. The rules aren't for China to exploit.

China's "developing" status allows "additional transition time," in implementing necessary local IP regulatory regime. China's WTO Accession was in 2001 and this transition arrangement/allowance expired about 15 years ago and China is still inconsistent with the global standard (see for instance EU's recent anti-injunction suit). Nothing under the WTO allows China's illegal forced tech transfer/IP theft otherwise.

> I don't think the WTO has ruled on that complaint.

Sure, there was hardly anything for China to deny or defend. China instead agreed to reform their foreign investment laws (FIL): no further market restriction or force tech transfer, but took another 3 years to implement in 2020/2021 and many are still afraid to pull out some 4-5 years later; again Tesla being the only foreign automaker operating fully independently without a JV in China.

> The US faced virtually no competition for EV vehicles from China before 2022. The protectionist measures came up as soon as the competition appeared.

BYD's electric bus business in California has been around since the early 2010s. The Japanese + Korean battery producers, such as LG, Panasonic, Samsung, etc banned in China since 2015 under Xi's protectionism (aka, Made-In-China 2025), have been in the US without any restriction for well over a decade. The last American battery producer, A123, collapsed in 2012 and the foreign battery producers have dominated the US market without any restriction. Unlike China, America has no problem collaborating with foreign trading partners.

> You're really going to claim that China does not lead in current-day research?

Not really. Many are awe'ed as China's illegally subsidized overcapacity floods their local market, but often conflate the two: market domination vs. tech innovation. China's competitive edge is a function of China's illegal subsidies and protectionism. No evidence to believe Chinese EV/battery producers can compete without daddy Xi's big wallet or baton to keep away foreign competition.

> You're reaching back to decades ago, ..

Sure, most lithium ion battery tech used in today's EVs were developed over 20+ years ago and most relevant EV battery patents developed past 10-15 years are by Japanese/Koreans and they will dominate for quite some time. Again, this is why China has focused on LFP (effectively royalty free after 2022/2023 for export) or post-lithium batteries instead. In other word, China is likely to benefit from their R&D in post-lithium once they are commercialized and mass-produced at scale years down the road, if ever.

> Government subsidies are fairly small, and are paid to the consumer (not the producer), ...

Already cited an article showing that China's consumer direct subsidy was significant (see example #1, $19+K per EV which more or less continued until 2019) and another showing that the consumer subsidy was anything, but pro-consumer (see example #3) -- consumer's choice was limited to EVs with Chinese batteries to funnel subsidies back to their local battery "champions" only -- ie, anti-consumer. China's neo-mercantile economy prioritizes national "champions," not consumers.

> so they don't affect the cost of exported goods.

Of course they do. That's what EU's recent probe (2024/1866 and 2024/27) revealed and also why China hand them out like Halloween candies.

> Chinese companies are selling EVs in Europe at far, far higher prices than in China.

Again, China's local price or cost of production don't mean jack -- China is a non-market-economy and their local price/cost products are artificially deflated by the Chinese gov't's illegal subsidies. Also cited EU's Anti-dumping Regulation (2016/1036) explaining how the "normal value" is determined in such a case (see Article 2, Determination of dumping; A. NORMAL VALUE). It's well to remember however that Chinese EVs are countervailed under EU's Anti-Subsidy Regulation (2016/1037) where the price level/normal value is NOT a major consideration.

Thanks for playing, but I don't like talking in circles. Good bye.

[DiogenesKynikos]

> Wrong. That only applies to LDC, or Least Developed Countries under the TRIPS Agreement, GATT 1994.

No, it's strongly encouraged for least developed countries.

> Nothing under the WTO allows China's illegal forced tech transfer/IP theft otherwise.

There is no "forced tech transfer," and we're not discussing IP theft, which is not allowed by China's IP laws. Companies are making decisions to enter into IP sharing agreements with joint-venture partners, out of their own economic calculus. They're free to refuse.

> again Tesla being the only foreign automaker operating fully independently without a JV in China.

Not true. You need to update take a refresher on this issue. Toyota is setting up its own wholly owned operations in China, for example: [0].

> BYD's electric bus business in California has been around since the early 2010s.

This is a tiny niche in the US market. Meanwhile, US auto manufacturers have had large market shares in China for decades.

> Again, this is why China has focused on LFP (effectively royalty free after 2022/2023 for export) or post-lithium batteries instead. In other word, China is likely to benefit from their R&D in post-lithium once they are commercialized and mass-produced at scale years down the road, if ever.

So you're admitting that Chinese companies are respecting foreign IP and responding by innovating in areas not covered by that IP.

> Of course they do. That's what EU's recent probe (2024/1866 and 2024/27) revealed and also why China hand them out like Halloween candies.

No, tax rebates to customers in China do not reduce the cost of cars exported to Europe. China "hands [tax rebates to customers] out like Halloween candies" because it wants to rapidly transition to EVs (and has been incredibly successful in doing so).

> China's neo-mercantile economy prioritizes national "champions," not consumers.

Yet somehow, EVs are way cheaper in China than in the EU and US, and all the local companies are engaged in continuous price wars.

> Again, China's local price or cost of production don't mean jack -- China is a non-market-economy and their local price/cost products are artificially deflated by the Chinese gov't's illegal subsidies.

Those "illegal subsidies" (a loaded term) are overwhelmingly tax rebates to consumers - the exact same mechanism that the US and many EU countries use.

> Not really. Many are awe'ed as China's illegally subsidized overcapacity floods their local market, but often conflate the two: market domination vs. tech innovation. China's competitive edge is a function of China's illegal subsidies and protectionism. No evidence to believe Chinese EV/battery producers can compete without daddy Xi's big wallet or baton to keep away foreign competition.

This is just completely out of touch with reality. I'll just say two words: BYD, CATL. It's getting to the point that European countries are talking about encouraging battery technology transfer from China.

0. https://www.reuters.com/business/autos-transportation/toyota...