Yao Yang: No to Retaliations Against EU Tariffs
"[China should] refrain from retaliating against the EU’s tariffs. This would have the added benefit of giving China a geopolitical advantage in its rivalry with the United States."
Threats of retaliation have largely dominated Chinese reactions to the EU’s recent tariffs on electric vehicle (EV) imports from China. Yao Yang (姚洋), one of China’s leading and most outspoken economists, argues against adopting such retaliatory measures. Beijing should focus on improving its ties with the EU at a time of increasing US-China rivalry, he says. Although published in English last week, Yao’s piece doesn’t appear to have received much attention. Thank you to Project Syndicate for allowing Sinification to share it here.
Key Points
China’s early push to develop its EV industry had two main drivers: first, resource security (mitigating its dependence on oil imports); and second, leapfrogging complex internal combustion engines to pioneer a brand new industry.
Yes, China’s EV boom was kickstarted thanks to generous government subsidies, but no it is not the only country to do this.
Rather than zeroing in on the issue of Chinese subsidies, the EU would do better simply to argue t…