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It also makes sense if Chinese car makers can only compete because of massive state subsidies, whose purpose is to bankrupt competition and gain control of the

It also makes sense if Chinese car makers can only compete because of massive state subsidies, whose purpose is to bankrupt competition and gain control of the market. From the EU's perspective, it might make sense to penalize Chinese imports to prevent them from succeeding with this strategy. While the stated reason may not be the actual reason, it's not a hypothetical that China does use this strategy and has used it in the past.

constantcrying 2y ago
In that case the EU strategy is still awful, as they are essentially just sabotaging their own companies, which currently are competing in China. This just makes certain that EU companies will loose to Chinese competitors, just in a different market. The right response isn't refusing the competition, the right response would be fighting China by creating an equal footing. I think the situation has a huge asymmetry and the EU seems dedicated on eradicating the strengths of their own companies.
- adriancr 2y ago
  Are EU companies even allowed to compete fairly in China?
  - constantcrying 2y ago
    Given that they have been doing so for many decades and have been very successful, I am sure that this is the case. The market is also quite complex, often EU makers compete through JVs.
    - adriancr 2y ago
      > often EU makers compete through JVs So they have to give up IP and control and part of their business to compete. That does not seem fair since China based companies are not forced to do the same. Can you even call them EU anymore? (since china typically requires 51% control to be chinese...)
      - constantcrying 2y ago
        >So they have to give up IP and control and part of their business to compete. They are selling their IP. It is business. >That does not seem fair since China based companies are not forced to do the same. Than maybe the EU can start there? >Can you even call them EU anymore? (since china typically requires 51% control to be chinese...) China does not own 51% of VW.
        adriancr 2y ago
        > China does not own 51% of VW Is VW the JV used to sell in China? > They are selling their IP. It is business. they have no choice if they want to sell in China. Look at Google if you want to see what happens if they refuse. > Than maybe the EU can start there? I think tariffs work just as well and are less complicated. It's not like Chinese companies would accept the same conditions. End result will be the same, decoupling. Long term this is better, more industrial infrastructure in EU serving global market. Less support for Chinese companies if they're limited to home country, less industrial base there to go to war.
        constantcrying 2y ago
        >more industrial infrastructure in EU serving global market What? No EU companies will serve any kind of global market. That is the point of Tarifs. The companies will suffocate and loose any kind of actual global presence.
        adriancr 2y ago
        > What? No EU companies will serve any kind of global market. That is the point of Tarifs. Thats not how tarriffs work. What will happen is Chinese exports will have to pay tarriffs to enter EU. Most China can do is impose tarriffs or nationalize or whatever within their borders. So less China<->EU trade. More market in EU since China vehicles cant compete. Now... here it becomes nicer. US is also imposing tarriffs on China. All of South east asia+India will impose as well since most are afraid of going to war with them. So, more market where China cannot compete and EU companies can fill gap. As such, tarriffs are good long term, they lose access to X but gain access to 3-5X. They are bad for China since they are suddently overproducing and have nowhere to sell so they have to downsize, earn less, etc... They're also bad for China because if they go after JVs they no longer get access to free IP to steal.
Dalewyn 2y ago
>massive state subsidies, whose purpose is to bankrupt competition and gain control of the market. It's a good thing that the west is finally realizing China is and has been waging a silent war on foreign economies to tremendous effect.
- constantcrying 2y ago
  >It's a good thing that the west is finally realizing China is and has been waging a silent war on foreign economies to tremendous effect. How can this be true when EU companies have been extremely successful in China?
  - DoingIsLearning 2y ago
    In China it is pay to play. My previous company was very successful in the Chinese market. But to get pass regulatory hurdles in order to be allowed to sell there, they first had to sell off a fraction of the company to CIC Nothing about it was ever explicit but the way things work was pretty clear.
  - homarp 2y ago
    like ARM? if you can provid some examples where there was no mandatory transfer of technology
  - mensetmanusman 2y ago
    Temporary success while they feed their downfall?
nopakos 2y ago
China has done this before, damaging the European steel industry with state subsidies.
- Rinzler89 2y ago
  Please. The German car industry has also been flushed with billions in state subsides, especially since covid. It's basically a polite mob shakedown. All that the likes of VW have to do is call up Scholz on speed dial and say "Look at all these thousands of workers and voters that depend on us selling more cars. You wouldn't want anything to happen to their jobs and families, would you? Think on how they'd vote if their livelihoods were to be impacted." Pointing the fingers at a China for state subsidies is a bit hypocritical, but it's very effective argument at local companies getting more state subsidies.
  - constantcrying 2y ago
    >Please. The German car industry has also been flushed with billions in state subsides, especially since covid. Can you name specific numbers? I haven't found anything except for VW paying subsidies for EVs from their own pockets. I think you got the situation reversed. VW, BMW, Mercedes are paying massive amounts of taxes, they and other large companies subsidize Germany, not the other way around.
  - formerly_proven 2y ago
    > It's basically a polite mob shakedown. All that the likes of VW have to do is call up Scholz on speed dial and say "Look at all these thousands of workers and voters that depend on us selling more cars. You wouldn't want anything to happen to their jobs and families, would you? Think on how they'd vote if their livelihoods were to be impacted." This would be a lot more convincing if the companies you refer to were in favor of tariffs on Chinese EVs.
    - Rinzler89 2y ago
      >This would be a lot more convincing if the companies you refer to were in favor of tariffs on Chinese EVs. Who said they aren't? They also know it would be tit for that. All those German car makers who built unfathomable fortunes on sales in China would also now face increased tariffs.
mtrovo 2y ago
Do you have any sources for the subsidies given to chinese car makers? On my cynical side I think the EU car makers have a huge leverage on the local manufacturing jobs and in consequence the public opinion. That can result in them bending laws to whatever they want (see the consequences for the dieselgate in EU so far). It's easy to not want to compete when you don't need to. Even if you assume the argument for JV being bad for business is valid, why only bring that up now that they're against the wall on their own local market?
- daghamm 2y ago
  The Chinese "companies" are all controlled by the goverment. CCP invests in different areas to advance their 25-50 year long term plans. We have seen many examples of a small Chinese company suddenly shelling out billions to buy a much larger competitor. Where do you think that money came from??
asadotzler 2y ago
US car companies get more from the USG and California than Chinese car companies get from the CCCP. If Europe can't compete with Chinese and US subsidies on passenger cars, they're in for some real pain in that industry.

constantcrying 2y ago

In that case the EU strategy is still awful, as they are essentially just sabotaging their own companies, which currently are competing in China. This just makes certain that EU companies will loose to Chinese competitors, just in a different market. The right response isn't refusing the competition, the right response would be fighting China by creating an equal footing. I think the situation has a huge asymmetry and the EU seems dedicated on eradicating the strengths of their own companies.

adriancr 2y ago
Are EU companies even allowed to compete fairly in China?
- constantcrying 2y ago
  Given that they have been doing so for many decades and have been very successful, I am sure that this is the case. The market is also quite complex, often EU makers compete through JVs.
  - adriancr 2y ago
    > often EU makers compete through JVs So they have to give up IP and control and part of their business to compete. That does not seem fair since China based companies are not forced to do the same. Can you even call them EU anymore? (since china typically requires 51% control to be chinese...)
    - constantcrying 2y ago
      >So they have to give up IP and control and part of their business to compete. They are selling their IP. It is business. >That does not seem fair since China based companies are not forced to do the same. Than maybe the EU can start there? >Can you even call them EU anymore? (since china typically requires 51% control to be chinese...) China does not own 51% of VW.
      - adriancr 2y ago
        > China does not own 51% of VW Is VW the JV used to sell in China? > They are selling their IP. It is business. they have no choice if they want to sell in China. Look at Google if you want to see what happens if they refuse. > Than maybe the EU can start there? I think tariffs work just as well and are less complicated. It's not like Chinese companies would accept the same conditions. End result will be the same, decoupling. Long term this is better, more industrial infrastructure in EU serving global market. Less support for Chinese companies if they're limited to home country, less industrial base there to go to war.
        constantcrying 2y ago
        >more industrial infrastructure in EU serving global market What? No EU companies will serve any kind of global market. That is the point of Tarifs. The companies will suffocate and loose any kind of actual global presence.
        adriancr 2y ago
        > What? No EU companies will serve any kind of global market. That is the point of Tarifs. Thats not how tarriffs work. What will happen is Chinese exports will have to pay tarriffs to enter EU. Most China can do is impose tarriffs or nationalize or whatever within their borders. So less China<->EU trade. More market in EU since China vehicles cant compete. Now... here it becomes nicer. US is also imposing tarriffs on China. All of South east asia+India will impose as well since most are afraid of going to war with them. So, more market where China cannot compete and EU companies can fill gap. As such, tarriffs are good long term, they lose access to X but gain access to 3-5X. They are bad for China since they are suddently overproducing and have nowhere to sell so they have to downsize, earn less, etc... They're also bad for China because if they go after JVs they no longer get access to free IP to steal.

Dalewyn 2y ago

>massive state subsidies, whose purpose is to bankrupt competition and gain control of the market. It's a good thing that the west is finally realizing China is and has been waging a silent war on foreign economies to tremendous effect.

constantcrying 2y ago
>It's a good thing that the west is finally realizing China is and has been waging a silent war on foreign economies to tremendous effect. How can this be true when EU companies have been extremely successful in China?
- DoingIsLearning 2y ago
  In China it is pay to play. My previous company was very successful in the Chinese market. But to get pass regulatory hurdles in order to be allowed to sell there, they first had to sell off a fraction of the company to CIC Nothing about it was ever explicit but the way things work was pretty clear.
- homarp 2y ago
  like ARM? if you can provid some examples where there was no mandatory transfer of technology
- mensetmanusman 2y ago
  Temporary success while they feed their downfall?

nopakos 2y ago

China has done this before, damaging the European steel industry with state subsidies.

Rinzler89 2y ago
Please. The German car industry has also been flushed with billions in state subsides, especially since covid. It's basically a polite mob shakedown. All that the likes of VW have to do is call up Scholz on speed dial and say "Look at all these thousands of workers and voters that depend on us selling more cars. You wouldn't want anything to happen to their jobs and families, would you? Think on how they'd vote if their livelihoods were to be impacted." Pointing the fingers at a China for state subsidies is a bit hypocritical, but it's very effective argument at local companies getting more state subsidies.
- constantcrying 2y ago
  >Please. The German car industry has also been flushed with billions in state subsides, especially since covid. Can you name specific numbers? I haven't found anything except for VW paying subsidies for EVs from their own pockets. I think you got the situation reversed. VW, BMW, Mercedes are paying massive amounts of taxes, they and other large companies subsidize Germany, not the other way around.
- formerly_proven 2y ago
  > It's basically a polite mob shakedown. All that the likes of VW have to do is call up Scholz on speed dial and say "Look at all these thousands of workers and voters that depend on us selling more cars. You wouldn't want anything to happen to their jobs and families, would you? Think on how they'd vote if their livelihoods were to be impacted." This would be a lot more convincing if the companies you refer to were in favor of tariffs on Chinese EVs.
  - Rinzler89 2y ago
    >This would be a lot more convincing if the companies you refer to were in favor of tariffs on Chinese EVs. Who said they aren't? They also know it would be tit for that. All those German car makers who built unfathomable fortunes on sales in China would also now face increased tariffs.

mtrovo 2y ago

Do you have any sources for the subsidies given to chinese car makers? On my cynical side I think the EU car makers have a huge leverage on the local manufacturing jobs and in consequence the public opinion. That can result in them bending laws to whatever they want (see the consequences for the dieselgate in EU so far). It's easy to not want to compete when you don't need to. Even if you assume the argument for JV being bad for business is valid, why only bring that up now that they're against the wall on their own local market?

daghamm 2y ago
The Chinese "companies" are all controlled by the goverment. CCP invests in different areas to advance their 25-50 year long term plans. We have seen many examples of a small Chinese company suddenly shelling out billions to buy a much larger competitor. Where do you think that money came from??

asadotzler 2y ago

US car companies get more from the USG and California than Chinese car companies get from the CCCP. If Europe can't compete with Chinese and US subsidies on passenger cars, they're in for some real pain in that industry.