Competitiveness of China's new energy sector is enhanced by genuine competence



Some Western politicians claim that China's new energy industry relies on industrial policies to gain a competitive edge. However, facts and figures prove that such a narrative is false and unfounded.


China's advanced production capabilities in the new energy sector have been enhanced through diligent efforts and genuine competence, rooted in market competition, innovation, and entrepreneurship.


China's ascendancy in new energy products is sustained by a constellation of factors, heralding a competitive advantage. Among them, early investments in research and development, the establishment of a robust industrial ecosystem, access to a vast domestic market, rapid infrastructure evolution, and a vibrant market full of competition among state-owned, private, and foreign enterprises and rapid technological iterations stand out.


The success narrative of Contemporary Amperex Technology Co., Limited (CATL) encapsulates this trajectory, underscored by its pioneering technology and market leadership position, forged through tireless pursuit of innovation and strategic vision. In 2023, CATL's commitment to research and development materialized in an investment of approximately 18.4 billion yuan (US$2.59 billion). Notably, the company has consistently maintained the highest growth rate in the sector in patent applications.


In recent years, China has been substantially reducing subsidies in the new energy vehicle (NEV) sector. In contrast, nations such as the United States, United Kingdom, and France are expanding robust support via subsidies for electric vehicles.


According to Liu Hongzhong, deputy director of the Chinese Society of World Economics, the landscape of industrial policies has undergone a notable shift since 2008, with developed countries launching a plethora of initiatives. However, many of them, such as the U.S. Currency Exchange Rate Oversight Reform Act, bear the hallmarks of discriminatory practices, often wielded as geopolitical instruments under the pretext of risk mitigation.


Indeed, the United States has been a global leader in the use of industrial policies and government subsidies. Its extensive subsidies, coupled with discriminatory clauses, contravene established norms in the global market and international trade, distorting global industrial chains. The United States is providing an impressive $52.7 billion for semiconductor manufacturing subsidies and $369 billion in tax incentives and subsidies for clean energy industries, including electric vehicles.


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