Mastodawn

EU pulls its gun on China: The EU is accelerating its crackdown on what it sees as Beijing’s unfair support for companies that undermine European rivals

https://lemmy.world/post/14704948

EU pulls its gun on China: The EU is accelerating its crackdown on what it sees as Beijing’s unfair support for companies that undermine European rivals - Lemmy.World

Europe’s phoney war with China is at an end. After years of building up an improved arsenal for a trade war, Europe is now showing it is willing to get tough on Beijing. On Tuesday, EU investigators swooped on the Dutch and Polish offices of Nuctech, a maker of security scanners, in a case that hinges on one of Europe’s longest running grievances with China — lavish state subsidies that help Chinese firms undercut European rivals. Nuctech was once run by Hu Haifeng, son of President Xi Jinping’s predecessor, Hu Jintao, and China’s reaction was predictably seething. The raid “highlights the further deterioration of the EU’s business environment and sends an extremely negative signal to all foreign companies,” China’s mission to the EU fumed [http://eu.china-mission.gov.cn/eng/mh/202404/t20240425_11288699.htm]. The timing of such an inflammatory raid seems significant, ahead of a trip to Europe by Xi next month — his first in five years, taking him to France, Serbia and Hungary [https://www.politico.eu/newsletter/china-watcher/will-xi-double-down-against-nato-in-serbia/] — marking a definitive shift in the way that Europe is prepared to tackle its trade problems with China.

Victor Apr 26, 2024

This is mind-bending politics to me. My brain can’t handle the intricacies. I barely understand what this is about.

Lath Apr 26, 2024

Theatrics. It's just a play by phony actors.

Victor Apr 26, 2024

Interesting. Any further details? Please explain as if I’m a high schooler. 😅🙏

SlopppyEngineer Apr 26, 2024

High schooler. Got it.

So you’re pals with this guy Xi. He helps you with your homework. Turns out he’s only pals with EU because he’s banging your sister, Europa, after homework is done. So when you’re at Xi’s place you want to bang his sister, but he says no. You want so say no, but then no more homework help, so you study hard to do your own homework and say hands of my sis, creep.

Then you wait to see what happens. Maybe Xi now only bangs Hungary but she’s a dirty slut anyway.

Victor Apr 26, 2024

lmao alright. Perfect, thank you. And finally, what are the real world sisters and the homework? 😄

SlopppyEngineer Apr 26, 2024

Trade and manufacturing respectively. That’s the simple version anyway.

FarceOfWill Apr 26, 2024

No wait, your problem is xi is flooding the market with cheap homework so there’s no point in anyone else doing it. It’s easier to just use his that he’s practically giving away leading to everyone being dumb.

You want to… er… do your own homework so you can grow up strong and clever.

Ok no sorry I think the analogy is just wrong :)

SlopppyEngineer Apr 26, 2024

I prefer the term “oversimplified”.

nexusband Apr 26, 2024

Basically, China pumps incredible amounts of money in to companies, so they can undercut prices from EU companies crazy - forcing the EU companies to give up. EU wants to level the playing field.

Victor Apr 26, 2024

Ah okay, wow, nice and concise. Well done, thank you! 🙏

zephyreks Apr 26, 2024

So does the US, though? Tesla has received an absurd amount of government support. So has Intel. This is targeted at China specifically, it’s not some economic leveling scheme.

nexusband Apr 26, 2024

There’s still a huge difference, because most of the subsidies in “western” countries are Tax Subsidies (there are exceptions). Chinese companies get direct money. There’s also the fact, that management is often in the CCP, sometimes even directly involved in the law making and various other things. Almost all subsidies are also in government loans, meaning they have to be payed back - the difference to bank loans though is that the government loans do not have interest. Again something that isn’t happening in China…as the CCP mostly owns those companies as well, they do not have to pay back the money.

zephyreks Apr 26, 2024

Compare the subsidies received by Tesla and BYD. Cite your sources to back up your claims.

FenrirIII Apr 27, 2024

Yes, because the CCP are renowned for sharing information and transparency.

zephyreks Apr 27, 2024

Fine, then just tell me about what subsidies Tesla has received. I’ll wait.

Meron35 Apr 27, 2024

It is estimated that China’s subsidies for its domestic industries are extraordinarily high, ranging from 3-9 times compared to that of other OECD countries. BYD in particular is estimated to have received 2.1 billion EUR in 2022 in direct subsidies alone. This figure is understood to be understated due to additional indirect assistance such as cheaper access to batteries etc.

For comparison, Tesla is estimated to have received around 2.8 billion USD in combined state, local and federal subsidies, with an additional 460 million USD in the form of bailouts and loan assistance.

China’s Massive Subsidies for Green Technologies | Kiel Institute - ifw-kiel.de/…/chinas-massive-subsidies-for-green-…

Subsidy Tracker - subsidytracker.goodjobsfirst.org/…/tesla-inc

China's Massive Subsidies for Green Technologies

A new study by the Kiel Institute indicates that Beijing heavily subsidizes its domestic industries, particularly in sectors such as green technologies like electric mobility or wind power. Estimates suggest that China's overall subsidies range between three to nine times that of other OECD countries such as the USA or Germany. According to the analysis of new data, one of the major beneficiaries is the electric car manufacturer BYD. This reflects BYD's significant expansion in both technological and production capacities, as well as its increasing competitiveness.

Kiel Institute

zephyreks Apr 27, 2024

Elon Musk’s growing empire is fueled by $4.9 billion in government subsidies

Story from 2015. If you include the tax rebate incentives (which are included in BYD’s reporting, but which function differently in China because China lacks direct income tax), Tesla’s numbers skyrocket:

Tesla to get US$41 billion in government subsidies over made-in-US EVs and batteries

Tesla has received more than $3.2 billion worth of direct and indirect California subsidies and market mechanisms since 2009, according to an estimate from Newsom’s office.

If you want to argue that the $7500 EV purchase incentive is not a direct subsidy because it has no specific cash value (since it’s dependent on the person’s tax burden)… Be my guest, but that’s a laughable position.

Elon Musk's growing empire is fueled by $4.9 billion in government subsidies

Los Angeles entrepreneur Elon Musk has built a multibillion-dollar fortune running companies that make electric cars, sell solar panels and launch rockets into space.

Los Angeles Times

Everythingispenguins Apr 27, 2024

Found the tankie

mamotromico Apr 27, 2024

If the World Bank and the IMF find the data released by China credible, why can’t you?

HobbitFoot Apr 26, 2024

Before the Industrial Revolution, Europe had an issue trading with China as Europe had issues finding anything to trade. Europe’s natural resources weren’t valuable enough and China was able to produce many manufactured goods.

The colonization of the Americas was done in part to either get new natural resources not located in China or precious metals like silver and gold. The trade deficit got so bad that the UK and other European countries started selling opium as a way to balance trade.

China’s reindustrialization is bringing itself back to that old status quo and the EU is trying to fight this.

cosmicrookie Apr 26, 2024

I hear EU discussions are on about the Chinese shops like Temu as well as discussions about Tik Tok

zephyreks Apr 26, 2024

The EU wants to keep people buying overpriced garbage instead of cheap garbage.

Why? I have no idea.

cosmicrookie Apr 26, 2024

I think that the main concern is, that EU has implemented certain quality requirements for its consumers, that are not being upheld by shops like these. It undermines the standards. I don’t see any issues with buying/selling products from China or other countries, inside the EU, but I understand that they need to live up to the standards required by the EU

zephyreks Apr 26, 2024

Plastic doohickeys have quality standards in the EU? This is news to me tbh

I know it’s true for more robust goods, but Temu isn’t exactly used to buy cars

barsoap Apr 26, 2024

Plastic doohickeys indeed have quality standards in the EU, e.g. plenty of phalates are limited to banned depending on product category (e.g. children’s toys). Without adherence to those standards no CE mark, without that no sales on the internal market.

FenrirIII Apr 27, 2024

Temu is a nightmare designed to destroy foreign competition

Xantar Apr 26, 2024

Okay please correct me if I’m wrong, but somehow I can’t help thinking China does nothing out of the ordinary, subsidies exist, if it forwards your goals why not use them ? It boggles my mind that you could both support free market and squirm at the idea of a country trying to take advantage of it.

The only difference I find is china dares cross a moral line the EU hangs itself with stubbornly.

And I don’t support China in any stretch, but I’m tired of the EU’s self victimization when it fails to defend itself by design. At some point you can’t blame those who dare win the game you’re throwing.

andrefsp Apr 26, 2024

What are you talking about? It’s known China pours tons of subsidies into their organisations that go so far as these organisations selling their products cheaper than what they cost to produce. They flood target markets with the clear intention of destroying local industries so they can take over the entire market for themselves.

Also, free market? A company who wants to operate in china will have most times to do some sort of technology transfer and give part of the control to the Chinese government. Add child labour on top of that and the horrible working conditions Chinese workers endure and you will start to having a picture of how absurd it is to have “free market” with China.

Free market is a good thing when you operate in the same leveled field.

Victimisation?! They EU has done nothing about China’s BS for way too long and it’s now finally taking action. That’s a good thing if you ask me.

Meansalladknifehands Apr 26, 2024

Eu does that also, we sell goods to other continents cheeper than what they can produce. We are not Innocent in this regard, we fuck over African producers by subsidizing the shit out of our products, so they can’t compete. Poor people buy our can of tomatoes, instead of tomotoes produced in the region, creating jobs and businesses.

The US does the same thing, when NAFTA was signed the US started to subsidizing agricultural, to take over the Mexican markets. Clinton knew this would make a lot of people poor in Mexico and they would probably emigrate to the US, so Clinton increased the border security.

Xantar Apr 26, 2024

Yeah you’re pretty much saying what I’m saying then.

Xantar Apr 26, 2024

Right, maybe I can be more clear on my stance then.

I don’t agree with the outcome, nor am I saying it’s a good thing china is doing. I mean I’m impacted by the EU’s decisions as a part of it, so I would be shooting myself in the foot.

What I’m saying is, the EU has been consistently making naive decisions when it comes to enforcing its economic safety. Making free trade agreements that would negatively impact its internal economical balance and turn out to be very much one sided, and not taking preemptive or earlier measures against china’s obvious economical dogma. It’s been decades. While I am indeed glad they finally do something about it, I’m just worried about the time it took them to realize the Chinese could be a threat or even worse, that they did it on purpose.

zephyreks Apr 26, 2024

Because the EU doesn’t really allow large-scale subsidies in the same way. Of course, the US does, which is why Tesla has been so successful and half the chip companies in the world just decided to set up new fabs there, but…

Ð Greıt Þu̇mpkin Apr 26, 2024

Fact that it’s Hu Jintao’s kid makes me think this is theatrics for both sides

Hu Jintao’s from a different faction of the CCP than Xi Jinping, this is effectively Europe hitting one of his potential rivals.

chingadera Apr 26, 2024

Who the fuck is it that is making these stupid taglines? Pulls it’s gun? Just post a normal title, if you have to spruce this shit up with nonsense, it means your writing sucks or the subject is not worth reporting in the first place

Everythingispenguins Apr 27, 2024

Well you know how the Europeans are famous for their strong gun culture.