Comment by gloryjulio
1 day ago
This. Most of the Chinese products met the definition of dumping. They over produce with suppressed wages, currency exchange rate, and government subsidies. The current generations of Chinese workers do not benefit from this. To clarify, they have top products, some are well paid. But the general trend is dumping.
I am curious when will other countries would actually start of defend their industries properly.
Industry talking points, meant to convince you to subsidize them.
You don’t need to subsidize domestic companies to adjust for currency exchange rate manipulation.
The government could for example impose a tariff that covers half the difference thus maintaining an unfair advantage for Chinese companies. Thus profiting from the manipulation without placing excessive burden on domestic companies.
Agree subsidies does not seem like the correct incentive structure. But that's what the other guy is doing so I guess that's what we have to do.
In general, can the EV industry survive without government subsidies? Maybe now it can in the US.
Also not convinced EVs (as they are currently) are vastly superior to ICE cars. Not accounting for the potential for ICE cars to vastly improve if there wasn't so much vested interest. So the whole EV industry seems a bit unsustainable...
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I assume you're joking, but this is just sales tax.
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Shouldn't we be writing thank-you notes to the Chinese tax payers who so graciously subsidies cheap cars for us?
I agree that Chinese workers and tax payers are hurt. But why do we need to 'defend' anything from their generosity?
It'll slowly hemorrhage your industry base, and your country will end up being a giant wasteland with guarded compounds here and there, eventually. You wouldn't want that.
>> Shouldn't we be writing thank-you notes to the Chinese tax payers who so graciously subsidies cheap cars for us?
I'd write a BIG thank you note to the Chinese taxpayers if they could send a direct cash payment instead, so I can use it towards my next EV purchase (of my own choosing).
Otherwise, I prefer not to participate in China's predatory pricing tactic enabled by illegal export subsidies to undermine foreign competitors and distort global market.
I'm fairly sure the subsidies are perfectly legal by local laws.
In any case, feel free not to buy goods you don't like. No one is forcing you to buy, or are they?
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It's been 20 years, most industries PRC value engineers to outcompete west stays cheap, because they're not dumping, they structurally bring cost down. The current generation of Chinese workers overwhelmingly owns a house, makes above median PRC wages, meanwhile RoW consumers, most without rivalling industries, benefit. Like at some point PRC dumping starts to look like cope, they ain't dumping, their competitors in other countries, who get plenty of subsidies, just ain't using it to compete.
> They over produce with suppressed wages, currency exchange rate, and government subsidies
I mean, so does Germany.
Technically, the USA only has the massive subsidies part since the IRA came to be but they also have tariffs so, not doing too bad distortion-wise.
At this point in time, pretty much everyone is already defending their industries. China is just playing its cards better than the others and with a head start when it comes to EV.
Tariffs aren’t the same thing as suppressing wages, overproduction, government subsidies, and managed currency to prevent deflation.
In the case of the US with respect to China they are mostly a retaliation to the above anti-competitive practices.
But I hear you on who is playing their cards better. I don’t think China is playing theirs very well. They pissed off both the US and EU, and even Mexico is enacting tariffs on Chinese products. American and European countries are taking action to stop Chinese anti-competitive practices. Nice factories you have there, too bad there’s nobody to sell those products to.
I also don’t know what you mean when you say for example the US and Germany are suppressing wages. I’m interested in what you mean by that specifically.
What is 'overproduction'?
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> They pissed off both the US and EU, and even Mexico
I'm sure they are in shamble knowing they made their main rival mad.
Apart from some moderate posturing to appease the US and a bit of moderate protectionism, the EU is still very much a trade partner however. A casual look at all the new Chinese brand factories in Hungary probably tell you everything you need to know.
Meanwhile they dominate the South American, African and South-East Asian markets.
> American and European countries are taking action to stop Chinese anti-competitive practices.
Personally, as a European, I would really appreciate if American started by stopping their own anti-competitive practices. It's objectively worse than what China is doing.
> I also don’t know what you mean when you say for example the US and Germany are suppressing wages.
Germany is suppressing wages. They have been doing so since the 2000s. It's indolore for them because their money can't appreciate as it's anchored by the rest of the union. It's terrible for the other members however especially considering Germany doesn't reinvest their surplus in the union.
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>> I mean, so does Germany.
How does German gov't subsidize their automakers' overcapacity? Their EV subsidies aren't/weren't exclusive to domestic EVs or EVs using certain domestic part. No issue with subsidies that are equally available to all eligible producers, domestic or foreign.
This is unlike in China where market access and EV subsidies were conditioned on forced tech transfer since 2011 -- for which China was litigated before the WTO (see WT/DS549 China - Certain Measures on the Transfer of Technology). Or worse, conditioned on using local batteries made by local battery "champions," CATL/BYD/etc only to funnel all NEV subsidies back to the local battery industry and undermine foreign competitors. In other word, no NEV subsidies to any EV with foreign batteries to protect local "champions." This practice is also illegal under Article 3(b) "Prohibition" of the WTO's Subsidies and Countervailing Measures (SCM) Agreement.
>> Technically, the USA only has the massive subsidies part since the ...
Biden's IRA subsidy ended in September. And let's realistic, the IRA was a weak and short counter measure against China's illegal practices past 15 yeras.