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Is that true?
How could China afford to do that?

You are assuming the CCP is acting rationally. Or at least, in an economically rational manner. It isn't. They have dirt poor Chinese laborer's working in a factory for 50c a day to make these EV's so that wealthy Chinese, and even wealthy foreigners can get them at a significant discount. Maybe even half price.

The CCP has put the brakes on the Chinese economy, slowing and possibly reversing what was until about ten years ago some impressive economic growth, stemming from a rapid transition from starvation communism to market based capitalism.

I expect the CCP is looking at internal politics here. They have long abandoned communism, and the "communism with Chinese characteristics" BS is just an attempt to save face while they become the very people that the CCP spent a century and millions of deaths trying to eradicate - capitalist swine. The fundamental problem is that capitalism is essentially economic freedom, and it is hard to give that to people without also giving them all sorts of other rights, freedoms and democracy itself. Again, the CCP stooges on here rant about how terrible democracy is, but the CCP is internally democratic.

So, the CCP is walking the knife edge between giving the Chinese people enough freedom to make the country somewhat wealthy (and the CCP powerful enough to project power externally) and giving them the tools to get rid of the CCP, which has been nothing but a blight on the Chinese people. The CCP has killed more of its own citizens than any other government in the history of the world. Only about 20% of those deaths came from the war in which the CCP seized control of China. Most arose from communist policy, lies, and sheer incompetence on the part of the CCP. Like the Great Chinese Famine, or more recently, mismanagement of the initial covid outbreak.

I suggest that western countries, instead of fearing this one, take advantage of it, and let the Chinese subsidise our electric vehicles. Maybe not the military ones, but passenger ones at least.

It is not a loss leader. We are not going to go to China because the milk, bread and EV's are cheap, and then purchase the steak, laundry powder and apples while we are there.

It is not a cunning plan to seize control of the industry, either for future military gains or even economic ones. The auto industry used to stick around for generations. Not any more. First Japan, then Korea, and now China started new auto industries at an astonishing pace, only to be overtaken by the next player. 100 years ago passengers cars were leading edge western technology. Now they are more on the basket weaving end of the spectrum, with the economics driven largely by cheap labor.

The best thing the CCP could do for China's auto industry (and the hip pocket of car buyers here) is destroy China's economy yet again, so the people will work for only 20c a day. They may well do it. Do not make the assumption that the CCP's interests are the same as the interests of the Chinese people. They are not. It is something that people in western countries might take for granted. Our governments have been selling out individual people and industries since the 80's, including the auto industry. Not because it is in their narrow self interest. It is a vote loser. Rather, because it is in the national, and even international interest (trade agreements) to do so.

The CCP will happily kill 100 million Chinese people in order to stay in power, and once they gain power, to exercise the whim of their leader. They have done it before, and may well do it again. They did it recently with covid, and for the last decade or so they have been sacrificing China's economy in an effort to maintain that grip on power. Let them do it. It is to our benefit. It is too the benefit of China's poor. And the CCP will inevitably discover, if it hasn't already, that rich people are more likely to open their eyes and ask difficult questions.

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It can. It has done it before. China has gone through many purges where they killed the "rich" in huge numbers. They did it to achieve the Great Chinese Famine, where about 50 million people starved to death, in addition to the people that were deliberately killed. Mao took a bit of a holiday after that, but then came back for round 2.

It was not forced on them. They realised it was necessary. The fundamental issue for them was that they were suddenly a dirt poor country surrounding by developing and even first world economies like Japan and Korea. They did not just lose face because of this. They risked invasion, and they risked an internal revolution. They had only recently been invaded by Japan, and Japan had grown ten times stronger since. It was easy during the sixties to convince starving Chinese people to feel sorry for impoverished Americans. Not so easy when the wealthy capitalists are right on their doorstep, eyeing them off as either a conquest or a source of cheap labour. The CCP was in no position to argue, so they went with the cheap labour option.

The CCP still has the old fears and insecurities, which is why our resident stooges try to raise UN rules to the level of religion. The risk of invasion is a particular issue that causes them to loose face, because the CCP took a step back in WWII to allow Japan to rape and pillage their way across the nation. It helped the CCP in the sense that the CCP's enemies were the only ones left to fight the Japanese, so the Japanese helped the CCP achieve what they could not on their own. Luckily the Americans then saved them from the Japanese. Cunning, and lucky, but it is not exactly a good look for them, and hardly reassuring to their sense of authority that they only came to power because of the whims of far more powerful enemies fighting wars that they could only be pawns in.

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OK. But not by the regions just ignoring CCP edicts and getting on with the job.

Even this may be putting it too strongly. They would have felt forced by the specter of invasion, but in reality there was nothing stopping the CCP starving its citizens to death again and keeping it a third world country. No-one has invaded North Korea, and they can barely keep the lights on.

I think it was the internal democracy within the CCP that allowed the change to happen peacefully. Too many people, including CCP members, recognised the inevitable benefits of capitalism, or at least, of the huge sums of money that foreign companies were offering in order to set up sweatshops. The leader who introduced the change was at an earlier time out of favour with the party, and in a NK style dictatorship probably would have disappeared.

https://www.ifw-kiel.de/publications/news/chinas-massive-subsidies-for-green-tec...




10.04.2024

A new study by the Kiel Institute indicates that Beijing heavily subsidizes its domestic industries, particularly in sectors such as green technologies like electric mobility or wind power. Estimates suggest that China's overall subsidies range between three to nine times that of other OECD countries such as the USA or Germany. According to the analysis of new data, one of the major beneficiaries is the electric car manufacturer BYD. This reflects BYD's significant expansion in both technological and production capacities, as well as its increasing competitiveness.

The authors recommend that the European Union engage in negotiations with the Beijing government amidst the recently initiated anti-subsidy proceeding against imports of electric vehicles from China, aiming to persuade China to withdraw subsidies particularly harmful to the EU. Given China's current macroeconomic weakness, its relative strength in green technology sectors, and its tensions with the US, the authors see a realistic chance of successful negotiations. "The Chancellor's trip to China next week offers an excellent opportunity to pave the way for such negotiations," says Dohse.

Bobby. wrote on Aug 28^th, 2024 at 12:27pm:


It's a false narrative: of course a (partially) state-planned economy will exhibit some degree of government "subsidization", by definition.

That's why China now produces the world's most competitive EVs; companies inChina started investing in the battery technology supply chain (as well as other green technologies like rare earths, and  magnets production for electric motors, PVs etc) 10 years ago, backed by the state.

MeisterEckhart wrote on Aug 28^th, 2024 at 12:44pm:


Like Shenzen, one of the world's technologically advanced cities - which didn't exist 30 years ago?

Indeed, much of the rest of China is also advancing at a rapid pace, as the country keeps expanding the world's largest HS rail network - and is now manning  its own space station.   

"Freedom"?