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China’s New Energy Industry Thrives on Genuine Expertise, Dismissing Allegations of Relying on Industrial Policies for Competitive Edge

by Krystal

Amidst allegations from Western politicians suggesting that China’s new energy industry relies on industrial policies for its competitive edge, a closer examination of facts and figures reveals such claims to be groundless and false.

China’s prowess in the new energy sector is not a result of government intervention but rather stems from diligent efforts, genuine expertise, and a robust ecosystem of market competition, innovation, and entrepreneurship.

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The country’s dominance in new energy products is attributed to various factors contributing to its competitive edge. These include early investments in research and development, the establishment of a thriving industrial ecosystem, access to a vast domestic market, rapid infrastructure development, and a dynamic marketplace featuring competition among state-owned, private, and foreign enterprises, alongside rapid technological advancements.

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The success story of Contemporary Amperex Technology Co Limited (CATL) epitomizes this trajectory, marked by its innovative technology and leading market position. In 2023 alone, CATL invested approximately 18.4 billion yuan ($2.59 billion) in research and development, maintaining the industry’s highest growth rate in patent applications.

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China’s reduction of subsidies within the new energy vehicle (NEV) sector contrasts sharply with the subsidy support extended by nations like the United States, Britain, and France for electric vehicles.

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According to Liu Hongzhong, vice-director of the China Society of World Economics, a notable shift in industrial policies has occurred since 2008, with developed nations introducing various initiatives. However, many of these initiatives, such as the US Inflation Reduction Act, are deemed discriminatory practices, often utilized as geopolitical instruments under the guise of risk mitigation.

Contrary to allegations, the United States has a long history of employing industrial policies and government subsidies. Its substantial subsidies, coupled with discriminatory clauses, distort global industry chains and contravene established market and international trade norms. For instance, the United States is allocating a significant $52.7 billion for semiconductor manufacturing subsidies and offering $369 billion in tax incentives and subsidies for clean energy industries, including electric vehicles.

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