The main difference lies in the scale, structure, and purpose of the subsidies. China’s subsidies to its EV industry are often larger (though per capita math may need to apply) and more targeted, aimed at rapidly developing a domestic EV market and fostering specific national champions in the industry.

Subsidies in the US and other nations are generally more diverse, targeting various interrelated industries and are driven by generalized policy objectives, such as promoting innovation or creating jobs.

Chinese subsidies and centralized policies can lead to market distortion, unfair competition, and an adverse impact on global trade through multiple mechanisms:

–Subsidies incentivize overproduction, leading to excess capacity in the market. This excess supply results in lower prices for Chinese EVs, undercutting competitors in other markets. When Chinese manufacturers sell their EVs abroad at prices below production costs (dumping), it can harm domestic manufacturers in those countries and distort global trade. Once domestic manufacturing becomes irreparably harmed, a reliance may form on Chinese manufacturing instead.

–Chinese policies often require foreign companies to transfer technology or form joint ventures with domestic partners to access the Chinese market. This leads to concerns about intellectual property rights and fair competition, as foreign companies may be compelled to share proprietary technology with Chinese partners.