Bojan Vrbnjak
China is said to support its automotive industry with high subsidies. The EU has been investigating this suspicion since last autumn and is considering the introduction penal import duties. A new study Institute for the World Economy from Kiel (IfW) is therefore particularly explosive: according to it, Chinese car manufacturers receive from the state billion subsidies.
According to the allegations studies has company BYD, the second largest manufacturer of electric cars in the world, in particular many benefits from government support. Direct subsidies for the company were 220 million in the year 2020 increased to 2,1 billion in the year 2022. A few years ago, they were also available purchase premiums, of which it is BYD only years 2022 received 1,6 billion. But she was Tesla z 0,4 billion the second largest recipient. Together they are vehicle manufacturers NEV (New Energy Vehicles), which in China refer to battery electric cars, plug-in hybrids and vehicles on fuel cells, received until 2022 the equivalent of 5,3 billion euros. According to the study IfW purchase premiums were awarded only for vehicles NEV, made in China, but not for imported vehicles.
Purchase premiums expire at the end of 2022. However, the government will continue to subsidize the sale of NEVs, for example by lower or zero purchase taxes. That fits subsidies, which by 2027, together with subsidized loans, will amount to 68 billion, as reported on the basis of the study Automotive Week. In addition to electric vehicles report IfW it also treats others environmental technologies, such as photovoltaic systems, wind turbines in battery cells, which are obviously just as heavily subsidized. They generally are industrial subsidies in China several times higher than in the West. Because of the high subsidies, it should EU to continue the proceedings against the import of electric cars from China, according to the IfW team. However, they are legal barriers for the introduction of high punitive tariffs, and the question is whether she would really do anything about it a disservice. Instead, Europe should use the information obtained in the process to negotiations with China on the elimination of subsidies that distort competition.
China defends himself against the proceedings, which have been ongoing since September. China CCCME Industry Association is the message on Friday that selection of companies, which were the subject of the investigation, was not adequate. Companies were selected in the sample BYD, Geely in SAIC. The EU Commission is like that deliberately chose Chinese manufacturers and no the largest exporters, which are Tesla in Renault, said the spokesperson of the association. An example is also an example double standards, as the EU does not act against it subsidies from the US Act on reducing inflation, he states Reuters words of the press representative. He also mentioned that there is more of Western manufacturers against the investigations. The company BMW said it could caused more harm than good.
Let's summarize the point: Subsidizing electric cars is fine. Also in Germany purchase premiums have been high for years, Tesla or Northvolt but they receive subsidies if v Germany produce electric cars or batteries. But it should subsidize companies from all countries, not only from your own country. Penal import duties is needed carefully study, because it would trade war particularly affected the German automotive industry, not to mention the rest of the economic field. China is an extremely important market for it. Almost everything important brands of Germany they have factories in China. We can only guess what might happen to them if the matter escalates. Negotiations are always better. By the way, that's exactly what he's doing right now US Treasury Secretary Janet Yellen in China, as America is just as affected by Chinese imports as Europe.
