From solar to EVs: With China's overproduction and state subsidies, the US and EU are working to ensure that their clean-energy sectors aren't wiped out by unfair competition
China faces more scrutiny from the West over its aggressive export practices — overcapacity and huge subsidies. The US and EU are working to ensure that their clean-energy sectors aren't wiped out by unfair competition.
Beijing's industrial subsidies are on average three to four times higher than in Organisation for Economic Co-operation and Development (OECD) countries — sometimes up to nine times as much. A report published this week by IfW-Kiel estimated that industrial subsidies amounted to €221 billion or 1.73% of China's gross domestic product in 2019. Another study put annual subsidies typically at around 5% of GDP.
The IfW-Kiel report revealed how Chinese subsidies for domestic green-tech firms had increased significantly in 2022. The world's largest EV maker, BYD, received €2.1 billion, compared with €220 million just two years earlier. Support for wind turbine maker Mingyang rose from €20 million to €52 million.
Europe's green-energy sector has already taken a beating from cheap Chinese imports of solar panels, which have wiped out several domestic players and prompted an EU anti-subsidy probe. Though EU countries installed record levels of solar capacity last year — 40% more than in 2022 — the vast majority of panels and parts came from China, according to data from the International Energy Agency.
Analysts argue that China can't succeed without strong and stable markets for its products, which should give US and EU leaders the edge in negotiations with Beijing.
As a German I hate to break it to you Germany, but didn't you kill your advanced clean technology more than ten years ago for fucking coal? And everybody said it would be a fatal mistake, we would be left behind?
For wind turbines that is still strong. It is just solar that is the problem. For the most part that was doing well, due to heavy subsidies for new solar installations in Germany. As soon as Chinese solar panels appeared, they were cheaper then German ones. Then subsidies got slashed at the same time and protection was low. So the domestic market shrunk a lot, while China was taking market share. Really bad government response.
One man's "investments" are another man's "unfair competition". The U.S. does the same thing with steel to prop up domestic steel companies. Try to import steel from Vietnam and they tax the hell out of it.
At the end of the day, if we do protectionism and bar China, I can only hope we do enact more subsidies, close if not on par with China, for our own industries so that we accelerate our transition to green energy. I don't really personally care if we ban Chinese products, I just think this is a bit of cope about someone who's just... doing better economic policies, that we should also be doing, instead of crying about "unfair market competition" as if free market absolutism is necessarily good (China isn't doing enough "free market" so they're "unfair", even though we're doing the same to a slightly lesser degree).
My personal preference would be doing what Norway is doing: setting up democratic state run organizations that do green tech so that we socialize the profits we do make from such an industry. That's Norway's approach to hydropower, where they own the vast majority of it, and they're ramping up efforts towards wind energy too. They also have a state oil industry, but obviously I'm not too happy about that in the context of climate change - however, it has been incredibly economically beneficial for the people of Norway, so we should likely copy their strategy for green tech.
Responding to specific paragraphs:
During a trip to China, Yellen said the country's unfair trade practices — dumping artificially cheap products on global markets — were a threat to US businesses and jobs. Washington is considering imposing higher tariffs and closing trade loopholes if Beijing maintains its existing policy.
"Artificially cheap" is basically a loaded term for "subsidized". We do the same thing for certain industries here in Europe, there's really nothing special about it. In fact, we should probably be doing more subsidies.
"Chinese subsidies are pervasive," Rolf Langhammer, former vice president of the Kiel Institute for the World Economy (IfW-Kiel), told DW. "They encompass almost all industries and are far larger than any EU or US subsidies."
Maybe we should increase our own subsidies instead? I really don't see the argument here - would we transition to a green economy too fast when climate change is a crisis in waiting? Why are cheap products a problem all of a sudden, I thought that was the primary reason we started using China to mass produce stuff on our behalf, i.e. we took advantage of their horrible working conditions that we know led to suicides and anti-jump fences. But now all of a sudden cheap stuff is a problem?
In addition to the huge subsidies, the report's authors noted, Chinese producers also benefit from preferential access to critical raw materials, forced technological transfers and less domestic red tape than their foreign competitors.
All of these sound like good things we should be doing. In fact, we are doing a little bit more of transparency (which is what "forced tech transfers" are, in less loaded terms - it's literally just making corporations share knowledge and cooperate) e.g. supply chain transparency in Europe is growing. Less domestic red tape sounds like a good thing? Norway has a similar "problem" of a government being a little bit too efficient. Obviously that's not a bad thing - maybe we should figure out why we're comparatively slow?
Langhammer noted that the West also benefits from the Chinese subsidies, as consumers can buy cars at a lower price while companies can access cheaper Chinese parts. Despite the threat from cheaper Chinese EVs, he said, some automakers were skeptical about the EU probe into Beijing's subsidies as firms such as Germany's Volkswagen and US EV leader Tesla receive them, too.
As in, Tesla has received Chinese subsidies. It has also received US and (I believe) EU subsidies too. And I'm talking about supply side subsidies, demand side subsidies like governments paying part of the price of EV cars have provided tens of billions in plenty of EU and EEA countries.
"Artificially cheap" is basically a loaded term for "subsidized".
No. Especially in this case, it is also a term for cheap manufacturing processes by ignoring environmental and social norms, including the use of forced labour. There's ample evidence for this. For example, it is the reason why European car makers were forced to quit their collaboration with a joint venture in Xinjiang.
we are doing a little bit of transparency.
That's a good idea, but it only works if and when both sides apply it and acting in good faith. However, there is, for example, no way of an independent investigation over so many alleged human rights abuses in China, even a simple market research (or shooting a photo in the public space) may lead to behind closed-door trials for espionage, ending with long jail terms. Let alone that China intentionally produces overcapacity, while at the same time protects its own domestic market. Things like these have nothing to do with transparency and collaboration.
These are just a few examples you may have (intentionally?) missed in your statement as it doesn't describe the economic reality well. Your anti-western sentiment is somewhat weird if I may say so.
No. Especially in this case, it is also a term for cheap manufacturing processes by ignoring environmental and social norms, including the use of forced labour. [...]
Then just target the anti-environmental, social, and forced labour parts? This article is specifically about unfair subsidies, not what you just mentioned. You're moving the goalpost.
That’s a good idea, but it only works if and when both sides apply [...]
Supply chain transparency in the countries that have enacted laws like that, apply internationally:
The [Norwegian Transparency Act] mandates that liable firms be able to account for the human rights and fair labor practices, not only of direct or “Tier 1” suppliers, but of all those indirect vendors and subcontractors who comprise the entirety of the upstream and downstream value chain.
Your anti-western sentiment is somewhat weird if I may say so.
I literally described Norway in a very positive way - my ideal approach. Are they no longer western? Or are you just being a weirdo because I don't like propaganda in general? I don't like Chinese propaganda, and I don't like whatever you're doing by having a profile consisting of 90% news articles about China. You're basically doing marketing by constantly pushing articles about China, similar to how adverts are constantly pushed in our faces. A normal person might post a few articles about China here and there, but your history is 90%.
Europe can do that to a very large extent domestically. We had a similar situation before 2008, when Spain and Germany offered huge subsidies to private households to boost the installations of solar roof tops, for example. Practically all of that money went into the coffers of Chinese solar tech suppliers. Europe must not make this mistake again, not in the least as many of Chinese products are produced under much lower environmental and social standards imho.
The alternative is to give subsidies to European production as well, as to counter Chinese subsidies. That makes both significantly cheaper and allows for mass investment. Also China can export to other markets as well. It does not matter, where green technology is deployed, just that it lowers emissions.
Reminder that OP's account is 90% articles about China and has said they have "Chinese friends so they aren't xenophobic" in defense of doing so. Bias and misinformation probabilities are high.
Yes, unlike you I don't post constant articles about China. I'd prefer not to see propaganda, whether that's Chinese funded propaganda, or your constant posting of anti-Chinese free market biased articles. If the rules of this sub didn't explicitly carve out an exception for you, maybe you would've been banned by now - unfortunately, only "foreign" and "billionaire" misinformation is banned from this sub, domestic/western misinformation is OK.
Also, I will respond to the article, but I'm not a paid state actor who does this as a full time job (unlike maybe you, otherwise your obsession with China is pretty weird), so I don't have the time to tackle the multiple articles you post about China ever day. I can only do so much as a normal person, and I can only really tackle the articles I have knowledge about (e.g. economics).
There you go, here's your response to the article (below). It took me 43 minutes to respond, while it took you a single copy paste to post the article (probably 5 seconds of effort). Maybe now you understand why I don't feel like responding to every single thing you post with a debunking? The effort it takes to tackle misinformation is much higher than simply copy pasting URLs.
It's shocking how this focus on quarterly stock price increases and other financial chicanery has left the West unable to plan and execute more than a few months in advance...
United States Treasury Secretary Janet Yellen warned China last weekend against overproducing clean-energy products such as solar panels, wind turbines and electric vehicles (EVs) in the race to slow climate change.
In addition to the huge subsidies, the report's authors noted, Chinese producers also benefit from preferential access to critical raw materials, forced technological transfers and less domestic red tape than their foreign competitors.
"US and European nervousness is coming at a time when electric vehicle demand [in the West] has faltered a bit," Brad W. Setser, a senior fellow at the Council on Foreign Relations, told DW.
German automakers have a quarter of their foreign direct investment in China and also benefit from Chinese subsidies and they fear retaliation," Langhammer said, referring to possible tit-for-tat measures Beijing may levy in the event of higher EU tariffs.
Washington is concerned that Chinese firms will use loopholes in US trade deals with Mexico and Canada to circumvent higher import tariffs by producing Chinese-branded EVs in the two neighboring countries.
Though EU countries installed record levels of solar capacity last year — 40% more than in 2022 — the vast majority of panels and parts came from China, according to data from the International Energy Agency.
The original article contains 978 words, the summary contains 189 words. Saved 81%. I'm a bot and I'm open source!
Unfair competition? US politicians have been killing pushes for green energy for decades, and now they’re crying foul when somebody else is doing it, and doing it cheaper?
I hope China continues to invest heavily into green energy technology that undercuts the US, because we’re not serious about it, and the climate can’t wait.