Chinese automotive industry

China is currently the country in the world that sells the most vehicles, although the leadership in value continues to be held by Japan. The recent EU awards won by the Chinese automobile industry show high quality, contrary to the opinion that lower prices mean worse quality (unsustainable claim). Accusing China of overproduction or dumping in the production of automobile vehicles makes no sense. It is a poor self-justification of the protectionist policy when it can compete. The 27% tariffs introduced by Trump (9% in the EU) have failed to substantially slow the growth of the Chinese automobile industry.

International trade is based on exchanging products in which each country has a competitive advantage. Despite the large subsidies from Western countries, neither the EU nor the USA have a competitive advantage in this field, nor in Electronics or in many others, in which China leads world production in an environment much more competitive than that of the Western and Japanese economic areas. China’s subsidies for electric vehicles in 20 years have been lower than those of the USA in 2023. The growth of Chinese exports by 58% compared to Japan’s 6% demonstrates the growing acceptance that Chinese vehicles have around the world. Proof of this is the 350% growth in imports since 2021.

The automobile industry is strategic for the EU due to the employment and wealth it generates. However, it is difficult to compete with her. Protectionism is a provisional measure that only delays the solution of the problem. Renault has understood the old aphorism of «if you can’t beat your enemy, join him» and has sold 50% of its combustion division to the Geely group. Renault will bring the first vehicles with a hydrogen engine to the market in 2028. These engines will be manufactured in the factories in Valladolid. By then, hydrogen production costs are expected to have decreased to make the use of this fuel profitable.