The European Union has announced that it will investigate subsidies given to Chinese automakers by the government in Beijing. EU Officials have cited these alleged subsidies as catalysts in creating an unfair market, as they have allowed Chinese companies to lower their prices through means unavailable to European firms.
Most Europeans view the electric car industry as vital for the creation of revenue and new jobs in Europe. Such surplus cannot exist without European companies, and Chinese subsidies have threatened the very existence of these firms by enabling Chinese companies to price their electric vehicles unreasonably low. Normally, setting prices too low is extremely unprofitable. However, Chinese firms have been able to do so because the subsidies they receive from China exceed the losses they would have incurred. Moreover, these low prices have lured customers away from European manufacturers, putting the latter at risk of going out of business. Since these subsidies are not reciprocated, EU officials contend that they have created an unfair market in Europe, which forms the basis of their investigation. During a time of increased tensions between the West and China, it is likely that this investigation will lead to trade restrictions against China.
By: Frank Kwak
Article: https://www.nytimes.com/2023/09/13/business/eu-china-electric-vehicles.html
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