Editorial: Is China's industrial competitiveness "replenished"?

For some time now, some Western politicians, media, and think tanks have been hyping up the topic of China's "large-scale industrial subsidies".   Some people in the EU even try to use this as an excuse to push for the so-called "European version of Article 301" to pressure China. The implicit logic behind it directly points to a core question: Is the strong international competitiveness of Chinese industries today built and supplemented by money?

Chinese products are widely popular, which are pieced together by enterprises, not "patched up" by the government. China's industrial subsidy policy is mainly guiding, strictly adhering to the rules of the World Trade Organization, and always adhering to the principles of fairness, transparency, and non discrimination. There are no prohibitive subsidies stipulated by the World Trade Organization rules. Taking the photovoltaic industry, which is often talked about by the United States and Europe, as an example, China's subsidies for photovoltaics have gone through a complete cycle from initial investment subsidies to electricity subsidies, and then to a comprehensive decline. In the early stage of industrial development (2009-2012), subsidies were mainly targeted at the first batch of demonstration power stations in domestic deserts, with the aim of verifying the technological roadmap. From 2013 to 2018, we entered the stage of electricity subsidies, but the subsidy standards were lowered by 10% to 20% annually, with the aim of using a fallback mechanism to force companies to accelerate technological iteration and reduce costs. Companies that rely solely on subsidies cannot make profits. By 2021, all central government subsidies for newly added photovoltaic projects will be cancelled. It should be noted that Chinese photovoltaic companies do not enjoy domestic subsidies for their overseas production capacity and orders, and participate in international competition solely based on their own cost control and technological advantages.

If subsidies alone can "supplement" competitiveness, then American and European companies that invest huge industrial subsidies should achieve considerable results, but this is not the case. The Financial Times revealed that the US Inflation Reduction Act has a total authorized funding of $430 billion over 10 years, but in its first year of implementation, nearly 40% of major investment projects with a cost exceeding $100 million have experienced delays of more than 2 months or even indefinite shutdowns, and the huge fiscal investment has not been converted into a leap in industrial competitiveness as scheduled. The EU has established several billion euro special funds, such as the Key Raw Materials Act and the Net Zero Industries Act, to provide continuous subsidies to local photovoltaic, wind power, and battery companies. At the same time, carbon tariffs and import quotas are set up to protect local industries. But what was the result? Still unable to 'replenish' competitiveness.

In fact, industrial subsidies, as a means of regulating market failures, supporting technology research and development, and early promotion, are a common practice in major economies around the world. According to research by the International Monetary Fund, 75 major economies worldwide will introduce over 2500 industrial policies in 2023, with developed economies being the core drivers. In August 2025, the US government used the unpaid $5.7 billion grant from the Chip and Science Act and, together with other funds, acquired a 9.9% stake in Intel for a total investment agreement of $8.9 billion. As a result, US semiconductor companies became the group of chip companies in the world with the highest absolute value of government subsidies. The EU provides a large amount of subsidies to battery manufacturers and has also implemented protective measures against the imposition of countervailing duties on imported electric vehicles from China. The United States and Europe heavily subsidize local industries while accusing China of engaging in "unfair competition", which is a typical double standard.

The so-called 'subsidy dividend' is a hat that some Western institutions and media have put on China. They have infinitely expanded the concept of "subsidies", including government appropriations, income tax incentives, loans below market interest rates, and even normal commercial financing for enterprises. This accusation, based on the lack of unified standards, extensive estimation, and subjective inference, is highly questionable in its rigor and objectivity, and the conclusion is even more difficult to convince.

The real key lies in continuous technological innovation, a complete production and supply chain system, a huge market size, and intense domestic competition - these elements together constitute the endogenous driving force for Chinese enterprises to evolve and constantly break through. Chinese manufacturing is widely recognized in the international market, relying on such hard power. Taking new energy vehicles as an example, by 2025, the production and sales of new energy vehicles in China will both exceed 16 million units, with exports reaching 2.615 million units. It is worth noting that due to the impact of tariff policies in some countries, the overseas prices of Chinese new energy vehicles are generally higher than those in China, with price differences of the same model usually ranging from 30% to 50%. If Chinese products, as the outside world claims, rely on subsidies for "low price dumping" to seize the market, why are overseas consumers willing to pay higher prices than in China? Obviously, what they pay for the premium is leading technology, reliable quality, and comprehensive services, rather than the so-called 'subsidy dividend'.

Simply attributing the success of Chinese industries to "subsidies" will not help solve the practical problems of global industrial development, but will only seriously undermine the multilateral trading system and hinder the global economic recovery and green transformation process. Only by optimizing division of labor, expanding markets, improving rules, and sharing innovation through open cooperation can countries promote sustained growth in industrial scale and continuous improvement in product quality, ultimately enabling global consumers to enjoy safer, smarter, and greener products and services at more reasonable prices.