[tooltalk]

>> they'd at least let in the Chinese manufacturers that are interested in them.

China's anti-market tactics in EV/battery supply-chain past 15 years haven't exactly helped promote EVs outside China -- they are now countervailed not only in the US, but also the EU, Canada, Turkiye; even in China-friendly nations, such as Brazil and Russia now are imposing restrictions on Chinese EV imports. Not very realistic.

[Dylan16807]

What anti-market tactics? My understanding is they poured money over the whole market in a way that helped it grow faster, but didn't pick winners and doesn't subsidize the current pricing.

[dalyons]

Yeah this is an outdated talking point, because people can’t accept how far ahead Chinese auto are. They now just have a more advanced, innovative & competitive auto industry, with little subsidies.

[dalyons]

subsidies ended in 2022 https://www.reuters.com/world/china/china-cut-new-energy-veh...

[tooltalk]

Don't like posting a long comment, but re-posting a high-level chronological view of the problems past 15 years:

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.

2) Once foreign battery producers made IPR/IP concessions to access China's growing EV market and significant investment in battery production in China, they were effectively banned. All domestic, foreign automakers were likewise forced to switch to local champions, namely CATL/BYD, promoted under MIIT's 2015 "Regulation on the Standards of the Automotive Power Battery Industry”:

  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.”

3) Picking winners and losers: made sure no Chinese consumers had access to EVs with batteries from foreign EV battery producers effectively creating a captive market of buyers for CATL/BYD.

  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.

4) another fairly recent example of China's arbitrary regulatory barriers to keep out foreign competition, which was later dropped after the gov't found out their local "champion," CATL, couldn't pass the EV battery safety test:

  Why a Chinese Company Dominates Electric Car Batteries.  Keith Bradsher and Michael Forsythe, Dec 22, 2021, NYT

  ... 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.

Then, you also have China weaponizing their EV raw-material supply-chain, such as EV-grade graphite used as battery's anode material. China torpedo'ed Swedish battery company, Northvolt, with an export ban in 2020 because Sweden protected Chinese dissidents and called out human rights violation. Northvolt went bankrupt last year.

re: subsidies. China's consumer direct purchase subsidy ended in Dec 2022, but was extended again as tax credit for another 4 years in Jun 2023. Just to be sure though, there are many other subsidies besides the consumer subsidies at every layer of China's EV/battery supply-chain. The EU's anti-subsidy probe last year (see Regulation 2024/1866) for instance evolved around "export subsidies."

[Dylan16807]

1) I'm unsure if that's more anti or pro market to be honest.

2,3) Okay, yes, half-separating China from the rest of the world is anti-market. But then they did a lot inside the country that was pro-market. With a population of over a billion, I don't consider that picking winners.

4) That's obnoxious of them but doesn't really affect what I was saying.

subsidies) I was unaware of extensions, and I thought the supply chain subsidies were already gone? But okay, let's assume this is accurate, 17% duty on BYD. Man. As I've said before when Trump was talking about 25% on everything, I wish the US was putting 25% tariffs on Chinese EVs instead of whatever dumb number it is.

[tooltalk]

1) anti-market. China was likewise taken to the WTO in 2018 and agreed to end their restriction on market access/forced tech transfer, implemented in 2020/2021. Tesla is however still the only foreign automaker operating without a forced JV to this date.

2) restricting market access (and subsidies) to foreign automakers isn't exactly pro-market -- especially to those who were already in China and manufacturing products that local "champions" weren't able to mass-produce. All domestic, foreign Automakers forced to source inferior, yet also costlier, batteries. ie, anti-market.

3) demonstrates Chinese consumers wanted GM Velites with LG, but their choice was denied. Limiting 1.5B consumers' choice in the name of promoting national "champions"? anti-consumer and anti-market. Definitely picking winners and loser, or foreign over domestic.

4) just another example of arbitrary safety regulation restricting market access to foreign companies. ie, anti-market.

re: subsidies. China's EV subsidies have been around since 2009; renewed/extended every 2-4 years. That's also in addition to provisional subsidies thrown around time to time, eg, ICE-to-EV conversion subsidies between May-Dec 2024 to prop up slowing EV sales.

EU is quite silly with countervailing measures against China's dumping/anti-subsidies. Despite 100+ ACTIVE counter measures, the EU Commission still think the targeted approach against China's anti-market/mercantile practices can work. The EU should also consider imposing country-specific tariff rate of 100%, akin to Biden's tariff.

China's export ban against Sweden has shown that their NEV initiatives aren't really aimed at addressing environmental problem or benefiting their population.

[Dylan16807]

1) Getting in trouble doesn't make it anti-market. If you give stolen data to enough companies, you encourage competition more than you hinder it.

2) Restricting subsidies reduces the pro-market effect, but overall providing subsidies to such a big number of companies was pro-market.

3) Yes that's anti-market but when you're splitting up such a big market into two still very big markets it's not hugely anti-market.

4) It exposes corrupt motives more than it actually affects the market.

[tooltalk]

1) it was anti-market and that's why they were taken to the WTO, not the other around. This violation is also explicitly spelt out in Section 7 Non-Tariff Measures of China's 2001 WTO Accession Protocol. Not sure what point you are making with "stolen data," but subsidies must be given to all or none -- no picking winners or losers. The key idea here is a level playing field.

2) Restricting subsidies to some, but not others based on "local" vs "foreign"?-- ie, anti-market. All NEV subsidies were further conditioned on using Chinese batteries by local Chinese battery "champions" only to funnel them back to local battery industry is an industrial policy, definitely anti-market and anti-consumer.

3) what "two" markets? We are talking strictly about China's internal EV market and the Chinese gov't's anti-market policies; not the rest of the the World.

4) Sure, and the Chinese govt makes the "market regulation" in China. China's NEV market is likewise anti-market, anti-consumer, and corrupt.