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Subsidizing some technology or another isn't new. No, you just don't seem to understand how subsidies work. There are legal subsidies -- take for instance, fo
by tooltalk 3y ago
Subsidizing some technology or another isn't new.
No, you just don't seem to understand how subsidies work. There are legal subsidies -- take for instance, food or defense industries, or anything that's produced and consumed domestically is up to individual country to decide.
Then, there are illegal subsidies: "export subsidies" or "import substitution." China, as a member of WTO, is prohibited from giving any subsidy contingent on export performance, or on the use of domestic over imported goods. So for instance, China's subsidies were only given to EVs with domestic batteries made by domestic companies over foreign companies -- even if they were made in China, since 2015. China forced out foreign competitors, eg LG Chem which had close to 50% of the Chinese EV battery market share prior to this now down to less 1%, despite being the world's largest EV battery maker outside China, and ensured that only their domestic champions received EV subsidies in a market where subsidies accounted for as much as 40% of new EV cost. This is all ok, so long as China never intends to sell their EVs over the water -- after all, it's their money. China's EV initiative however was geared towards exports and dominating the field. EV subsidies elsewhere are obviously legal b/c, unlike, China's, they don't violate those rules.
Because its not just about cars, its everything from mine to the battery. And their policies weren't that anti-competitive, European and US car makers made a lot of money in China for quite a while and they didn't transfer much EV technology.
China's EV initiative didn't really start until 2009 when they first announced their EV subsidies. CATL for instance wasn't even founded until 2011; BYD was really nobody back then. The modern lithium ion batteries really became popular after SONY's first commercialization in the early 1990's -- the Japanese and Korean really kept the industry going since. And the leaders in the battery industry for instance were LG, Panasonic, Samsung, BASF, all of whom were asked to give up their IPR in exchange to access China's NEV market. This is detailed in the EU's WTO dispute against China's forced tech transfer - WT/DS549.
While China has long dominated the metal refining/processing industry largely due to developed countries' aversion to pollution, China's EV resource acquistion/spree likewise didn't really start until 2010's.