Pedal to the Metal: Subsidies to China’s Auto-Parts Industry
Pedal to the Metal: Subsidies to China’s Auto-Parts Industry
This chapter covers $27.5 billion in subsidies to Chinese auto-parts from 2001-2011 that helped make one of the world’s largest producers and exporters. The auto-parts “pillar industry” received the Chinese government’s strong support, growing more than 150 percent since 2004, but is highly fragmented with more than 10,000 registered and 15,000 unregistered manufacturers. U.S. global auto strategy centered on manufacturing in China and exporting back home. Consequently, China’s auto-parts exports to the United States are three times those of its next highest trading destination, Japan. Specific subsidies included $2.3 billion reported by 73 companies (2001-2009); $1 billion to coal (2001-2010); $0.6 billion to electricity (2002-2010); $0.3 billion to natural gas (2004-2010); $1.6 billion to glass (2004-2010); $3.2 billion to cold-rolled steel (2003-2010); and $18.4 billion for technology-development and industrial-restructuring (2001-2011). For the next decade, the government has committed an additional $10.9 billion in subsidies for industrial-restructuring and technology-development.
Keywords: Chinese subsidies to auto parts, Chinese policy, subsidies to coal, subsidies to electricity, subsidies to glass, subsidies to cold-rolled steel, technology development, auto industry, auto-parts trade, industrial restructuring
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