Simon Evenett (“In China trade war, beware those geopolitical grinches”, Letters, February 1) discounts the significance of China’s massive subsidies to its electric vehicle, lithium battery and solar panel industries, which are deliberately geared for export, in accordance with government economic planning.
We are here dealing with a non-market economy, a detail Evenett overlooks in his assertion, provided without evidence, that corporate subsidies will not inevitably result in excess capacity.
Apart from government intent, China’s consumer markets are less developed than elsewhere, while the government focuses on scientific and technological development, with military applications, instead of promoting their growth.
All of that “green production” would overwhelm China’s consumers but for the safety valve of exports. China’s solar panels have already stunted domestic production in the EU, while the same will occur with EVs and lithium batteries if the EU doesn’t raise protective tariffs against them. The Big Read (“The looming tensions over China’s subsidies”, January 31) article highlights the hypocrisy of China’s complaint against putative EU protectionism when its economy is thoroughly mercantilist and weighted against the foreigner as the regime pursues “self-reliance”.
If colleagues had heeded Joseph Chamberlain’s call in 1901 to abandon free trade for “fair trade” via “tariff reform”, to meet the German statesupported export challenge, Britain’s long-term economic decline might have been arrested, or at least tempered.
Emeritus Professor Albion M Urdank
University of California Los Angeles, US
