Once again ordinary people in the West are saved from affordable, low-pollution living. And Western companies are saved from having to compete.
That’s catchy, but not entirely true.
China heavily subsidizes EV manufacturers (and production in general), plus they have cheaper environmental and labour standards… it’s not like there’s a fair market EU companies can compete in without some sort of handicap.
PS: Yes, “western” countries have been playing along with China’s deliberate long term strategy with full awareness of where it would lead, but that’s another story that is both much older and has a much broader scope than the EV industry.
This is the market place, brah.
…
Free market capitalism
then talk about subsidies or non capitalist country controlling the currency, markets, VCs, etc.
What does that even mean?
If the US or EU want to keep up, they can sunbsidize EV manufacturing to the same degree
You can’t allow dumping-inducing subsidies without also allowing defensive tariffs, otherwise the richer and more authoritarian countries, which have greater capacity for subsidies and greater ability to concentrate them in specific sectors, will easily kill foreign competition and establish monopolies.
The marketplace brah is a place where, without regulations that maintain a degree of fairness, the rich kills the poor, competition dies off, and consumers are drained to their last cent.
Just think of it: competition is when different actors fight it off and it ends the moment one of the contenders wins.
If you want the fight to go on forever, you don’t want an unregulated market.
I feel like we would need to utterly destroy the working class to the point that cheap Chinese EVs would become expensive if we were to compete at the same level. I could be wrong, but how many of the chinese workers are driving brand new evs?
they can subsidize EV manufacturing to the same degree
Meaning that we would either have to increase tax rates or borrow more money? Wow, what a great solution.
China heavily subsidizes EV manufacturers (and production in general), plus they have cheaper environmental and labour standards… it’s not like there’s a fair market EU companies can compete in without some sort of handicap.
Hah. Volkswagen is in trouble right now because they fucked up the transition to electric cars completly. What do you think will happen now? That’s right, we the (German) people will have to save them now, with our money. Basically the same shit as a subsidy, just later in the process. Kinda like what the Chinese do, just the really stupid way.
Oh, and of course, it will be everybody’s fault but their own.
China heavily subsidizes EV manufacturers (and production in general)
And that’s a bad thing? Any sensible government is going to subsidise renewable energy and electric vehicles. It makes both economic and environmental sense. Anyone not doing this is an idiot and a climate terrorist.
Subsidizing sales of EVs (ie. I pay for my neighbor’s new EV because I want cleaner air) does make environmental sense.
Subsidizing production does not have the same positive environmental impact, mainly because factories in China pollute more than factories, say, in the EU (due to different environmental laws), but also because moving finished products from China to the “west” obviously pollutes more than moving just those components that would need to be sourced from China anyways (eg. batteries).
As for the “makes economic sense” part… IDK: I guess that mainly depend on your political stance.
Personally, I don’t like that both sales and production subsidies have the effect of moving money from the poor to the rich, but other people may focus on different effects (eg. more production = more jobs) and support subsides.
In case you wonder: my take is that, instead of incentivizing adoption and production of EVs, one should disincentivize internal combustion vehicles by adding taxes to them (which, in a sense, aren’t really taxes but just charging for the very real environmental costs society as a whole will have to pay for your shiny SUV).
Anyone not doing this is an idiot and a climate terrorist.
You should really think twice before spewing judgements… and also avoid misusing words like “terrorist” because, when misused this way, it only conveys that you don’t like someone, dulling your message instead of strengthening it.
You cherry picked his argument and left out the rest where he states China’s as cheaper standards of environmental “friendliness”
Can you explain to us what the problem with China subsidizing EV manufacturers is exactly? That’s how China chooses to run their economy, and it’s entirely their business. The whole argument for capitalist markets is that they’re supposed to be more competitive last I checked. If that’s not the case then maybe the west should reexamine its assumptions about how an economy should be run.
@yogthos @gomp It’s the capitalist textbook example, to conquer a market by undercutting prices and to crush competition in that market that cannot compete - and to later increase prices when there is no more competition. You can see this all over the world, not only with China and EVs, but also for example with Uber and the taxi business or Europe with their food exports to poorer countries outside the EU.
https://en.wikipedia.org/wiki/Dumping_(pricing_policy) (it’s not limited to EVs)
They do this in an attempt to take over other markets.
If nothing else, they help get their brands into the world.
There’s loads of chinese EVs driving around where I live now, so based on anecdotal evidence, it’s working.
is this the famous “invisible hand of the market”?
Competition is good! Unless it makes shareholders sad.
Slave labor is a system in which a person is bought sold and indentured to a master for a substantial duration, often life. Their labor is coerced as property of that master.
That is not how China produces cars. They use highly automated systems and paid workers like everywhere else. While Chinese workers are paid less due to the forces of unequal exchange (a system imposed by the US) and an export economy (a system usually imposed by the US but more of a 4D chess move by China to develop productive forces, with the US gladly taking the deal for exploitation), that is not really why the cars are so much cheaper. It is because China has highly concentrated industry and a much less financialized system.
Speaking about “fair” is amazing in this context. The US is simply trying to protect domestic monopsony industry and to damage Chinese industry. This is a jingoistic and corporate policy.
Chattel slavery is different than indentured servitude. There is no ownership of the indentured servant, but they are forced to work against their will. This is the slavery found in Xinjiang, as well as the US penal system.
what are you smoking https://www.reuters.com/world/china/how-unions-work-china-2021-09-02/
They can’t form new trade unions because everyone already has to join a registered trade union.
I’m so confused here. I was under the impression that the entire argument for capitalist markets was that they produce cheaper and better goods than is possible to do with central state planning. Yet, here we have the capitalist west complaining that Chinese state driven model if producing goods that western companies are simply not able to compete with. Somebody help me understand.
And I’m sure those Chinese workers definitely have the same compensation and rights as American or European workers.
They tend to be more efficient. However central planning in China which ramped up production yet has reduced demand, means an excess supply.
So, selling to Europe or USA makes sense to offload that supply. In a capitalist, closed system, they would have ramped down production, but also wouldn’t have had the capital to ramp up production so quickly.
If they weren’t seen as a strategic asset, then Europe and USA wouldn’t care that China is subsidizing cheaper products. They dont want their car industries dead as then they are dependent on China.
They tend to be more efficient. However central planning in China which ramped up production yet has reduced demand, means an excess supply.
That doesn’t really follow. You’d have to explain how you think ramping up production led to reduced demand exactly. Meanwhile, it’s not excess supply if you have customers around the world who want your product.
In a capitalist, closed system, they would have ramped down production, but also wouldn’t have had the capital to ramp up production so quickly.
That sentence doesn’t make sense. Companies don’t voluntarily ramp down production under capitalism.
If they weren’t seen as a strategic asset, then Europe and USA wouldn’t care that China is subsidizing cheaper products. They dont want their car industries dead as then they are dependent on China.
I think you missed my point here. It’s fine for the US and Europe to want to keep their industries alive. However, what we’re seeing is that they are not able to compete with state driven planning using capitalist markets. So now they’re starting to engage in non market behavior of putting tariffs on Chinese goods because capitalism is not proving to be competitive.
Ramping up production didn’t reduce demand. Demand reduced due to a softening Chinese economy, mainly due to debt and housing.
I agree, it’s not excess supply when you can sell it overseas. However, its also not central planning when you wanted to Ramp up supply for domestic consumption but end up using capitalism to keep efficiencies.
Companies ramp down production all the time. What do you think redundancies and factory closures are for? They react to market conditions or seek new markets (as happened in this case).
I thinknyouve got it backwards. Central planning can efficiently produce anything. As in, it can make as much of a product at the cheapest price as possible. The problem is central planning is less efficient at deciding how much is needed. It will often over or undershoot. Thats what happened here. Tonsaybthey can still sell overseas, so its still central planning being efficient is incorrect. Central planning didn’t work to produce the needed amount so trade through capitalism is being used to improve efficiency of the capital used.
@yogthos @geneva_convenience These tariff rates are calculated on a per manufacturer basis based on the subsidiaries that these manufacturers receive from their country. So it just restores the competition.
Chinese brands aren’t receiving 45% subsidies last I checked. However, this would be a dumb way to try and restore competition since it just punishes consumers in Europe.
Politicians be like