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When Western brands came to China, they were forced to make joint ventures with local manufacturers. The entire exercise ended up being a lark disguising a mass

When Western brands came to China, they were forced to make joint ventures with local manufacturers. The entire exercise ended up being a lark disguising a massive technology transfer. (In BYD's case, it was with Daimler). The partners exclusively got cheaper components, startup subsidies, and government assistance. Setting aside the lack of worker's rights and unions that makes Chinese manufacturing cheaper, the government is assisting these companies by eating up losses on the battery production and lithium mining. https://www.reuters.com/markets/commodities/china-is-oversupplying-lithium-eliminate-rivals-us-official-says-2024-10-08/ https://www.reuters.com/markets/commodities/china-is-oversup... If you try to read about BYD's lithium mining interests in places like Africa and Tibet, you will realize they are very cagey about the numbers on these deals. Effectively these cars are being "dumped" on the market at an overall loss. The EU report (take it with a grain of salt) found that BYDs were artificially cheaper by 17%. https://ec.europa.eu/commission/presscorner/detail/en/ip_23_4752 https://ec.europa.eu/commission/presscorner/detail/en/ip_23_... And this is after the markup they get in foreign markets.

DiogenesKynikos 2y ago
> When Western brands came to China, they were forced to make joint ventures with local manufacturers. No Western brands were forced to do anything. They could decide whether they wanted to enter the Chinese market or not. The companies that decided to enter the market under these conditions did so because they calculated that it would pay off. For many European companies, it paid off massively over decades. > The entire exercise ended up being a lark disguising a massive technology transfer. It wasn't "disguised." That was the purpose of the policy, and even the WTO says that technology transfer agreements are an acceptable development tool. China was a poor country that was trading market access and cheap labor for technology. The trade made economic sense for both sides - China and the Western firms. But that technology transfer turned out to be insufficient to make Chinese car manufacturers technologically competitive with the West. They never caught up in conventional internal combustion engine vehicles. They ended up leapfrogging Western manufacturers by going all-in on a new technology: EVs. > Effectively these cars are being "dumped" on the market at an overall loss. Chinese EVs are being sold at a significant markup in Europe, not at a loss. Dumping requires that you sell the same good at a lower price in foreign markets than locally, but that's the exact opposite of what China is doing. The EV market is much more competitive in China than in Europe, so Chinese manufacturers have to compete much more aggressively on price inside China. When they export to Europe, they sell at a significantly higher price. They're trying to rake in profits in Europe, not flood the market at a loss.

DiogenesKynikos 2y ago

> When Western brands came to China, they were forced to make joint ventures with local manufacturers. No Western brands were forced to do anything. They could decide whether they wanted to enter the Chinese market or not. The companies that decided to enter the market under these conditions did so because they calculated that it would pay off. For many European companies, it paid off massively over decades. > The entire exercise ended up being a lark disguising a massive technology transfer. It wasn't "disguised." That was the purpose of the policy, and even the WTO says that technology transfer agreements are an acceptable development tool. China was a poor country that was trading market access and cheap labor for technology. The trade made economic sense for both sides - China and the Western firms. But that technology transfer turned out to be insufficient to make Chinese car manufacturers technologically competitive with the West. They never caught up in conventional internal combustion engine vehicles. They ended up leapfrogging Western manufacturers by going all-in on a new technology: EVs. > Effectively these cars are being "dumped" on the market at an overall loss. Chinese EVs are being sold at a significant markup in Europe, not at a loss. Dumping requires that you sell the same good at a lower price in foreign markets than locally, but that's the exact opposite of what China is doing. The EV market is much more competitive in China than in Europe, so Chinese manufacturers have to compete much more aggressively on price inside China. When they export to Europe, they sell at a significantly higher price. They're trying to rake in profits in Europe, not flood the market at a loss.