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Governments across the developed world have pledged to decarbonise their economies in the coming decades, but many are also taking steps to limit imports of green technology made in China, without which decarbonisation will take more time and money, if it is achieved at all. At some point, Western leaders will have to choose between their climate goals and their protectionism, and it would be better for everyone if protectionism had to give way.
The contradiction is most evident in the case of electric vehicles. The EU has committed to phasing out the sale of conventional cars. By 2035The United States is pouring billions of taxpayer dollars into boosting domestic manufacturing of electric vehicles and batteries, but even as EV adoption is flagging (and slowing sales are affecting the broader supply chain, such as battery makers), leaders on both sides of the Atlantic have been outraged by a perceived threat to their domestic industries posed by ultra-competitive Chinese imports.
In the United States, that threat is entirely imaginary. The country hardly imports any Chinese electric vehicles. Joe Biden’s recent 100% tariff on Chinese-made electric vehicles will keep things that way. In Europe, the growing influx is real. Last year about one in five The electric vehicles sold in the EU – 300,000 units – were made in China (some of them by Western brands), but that figure is still a tiny fraction of the 10.5 million cars sold in the country. The EU in 2023 —all of which are soon supposed to be zero-emission.
A sense of proportion is long overdue. If Europe is serious about its EV goals, the problem is not that there are too many Chinese imports, but rather too few, given how slowly its own industry has moved away from internal combustion technology. Indeed, Europe’s EV goals are implausible without welcoming China’s ability to produce profitable cars in the cheapest segments. The US is also unlikely to adopt EVs on a large scale without much cheaper models being made available (its government subsidies have been insufficient). benefited overwhelmingly Wealthier consumers. The cost of living crisis makes affordability even more urgent.
As evidenced by a booming but still nascent second-hand market, there is a huge latent appetite for EV adoption at the lower end of the price scale. The West should welcome China into those markets, either through imports or by setting up production facilities locally. It is encouraging to see the UK refrain from joining the tariff wars.
If sufficiently ambitious policies are adopted to achieve the pace of EV adoption needed, there may be sufficient demand for both domestic and Chinese-made EVs. Better procurement policies, investment in charging infrastructure, and increased tax incentives for corporate buyers and investors would create the certainty of future demand that would encourage domestic producers to invest on a large scale.
There are, however, some legitimate reasons for concern. International trade rules allow for measures to offset unfair subsidies from trading partners, but these must be calibrated to the subsidy in question. Any real risks to data privacy (electric vehicles have been dubbed “smartphones on wheels”) must be addressed by surgical regulatory intervention on the specific software or components in question.
But the trees should not make Western governments lose sight of the forest. China can play a constructive role in the rich world’s decarbonisation process, particularly in its rapid transition to zero-emission mobility. This must certainly be reconciled with the need to stimulate green industry at home and the broader context of geopolitical conflict between Beijing and the West. But identifying where China can help must be as much a part of Western economic strategy and diplomacy as defending against the dangers it presents.