Some Western politicians allege that China’s new energy industry relies on industrial policies for competitive edge. However, facts and figures prove such a narrative groundless and false.

China’s advanced production capacities in the new energy sector have been honed through diligent efforts and genuine expertise, rooted in market competition, innovation, and entrepreneurship.

China’s ascendancy in new energy products is underpinned by a constellation of factors, heralding a competitive edge. Key among these are early investments in research and development, the establishment of a robust industrial ecosystem, access to a sprawling domestic market, the rapid evolution of infrastructure, and a vibrant marketplace teeming with competition across state-owned, private, and foreign enterprises, and rapid technological iterations.

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

In recent years, China has been substantially reducing subsidies within the new energy vehicle sector. In stark contrast, nations like the United States, Britain, and France extend robust subsidy support for electric vehicles.

According to Liu Hongzhong, vice director of the China Society of World Economics, the landscape of industrial policies has undergone a notable shift since 2008, with developed nations rolling out a plethora of initiatives. However, many of these, such as the U.S. Inflation Reduction Act, bear the hallmarks of discriminatory practices, often wielded as geopolitical instruments under the guise of risk mitigation.

In fact, the United States has long been a global leader in the use of industrial policies and government subsides. Its extensive subsidies, coupled with clauses tinged with discrimination, contravene established market and international trade norms, thereby distorting the global industry chains. The United States is providing a staggering 52.7 billion U.S. dollars for semiconductor manufacturing subsidies and 369 billion dollars in tax incentives and subsidies for clean energy industries, including electric vehicles.