A Traffic Jam of Subsidies and a Successful Domestic Market: Will Chinese NEVs drive to an ASCM Wall?

BYD electric bus and car on a Helsinki (Finland) street

Erdal Fere, 2023 LLM graduate, STL

  1. Introduction

Developing new energy vehicles is the only way to become a powerful country in automobiles,” said Xi Jinping, the General Secretary of the Communist Party of China in 2014.[1] Six years later, in 2020 in a speech to the United Nations, he stated that China “will step up support for new energy vehicles, develop charging infrastructure, and promote innovative development of the auto industry[2], meaning that the vehicles had become one of his priorities on his agenda. The market for New Energy Vehicles (NEVs) has blossomed ever since in the People’s Republic of China. There are several underlying reasons explaining this success. Hence, almost three years later, it is less of a surprise that China sits at the top of both production and sales of electric cars globally.[3] As the coup of the automobile market by the NEVs was successful on the national level, China has started exporting these vehicles at an increasing rate abroad.[4] However, it has still been a relatively rare sight to catch a BYD or a NIO[5] on the streets of Paris or Helsinki, but this is about to change as Chinese NEV companies are taking on the European market like a storm.[6]

From a practical perspective, it wasn’t Xi’s speech that enabled the thriving of NEVs in China, but the state’s policies. The New Energy Vehicle Industry Development Plan 2035 set the foundation, that is a broad and non-specific document stating certain goals for the industry. More particularly, the Chinese government,  at both the national and regional levels, has implemented specific policies to generously subsidize both the manufacturers of the NEVs as well as the consumers.[7] The rapid growth of the Chinese NEVs market compared to other regions or states also inevitably raises questions about economic competition and trade as is increasingly evident.

When international trade and economic considerations come at play, the World Trade Organization (WTO) often receives attention. And, as a member of the WTO, China has undertaken to adhere to the principles set by the named organization governing international trade.[8] That is why, this article examines whether the national policies of China concerning subsidies on electric car production and purchase are consistent with WTO principles, specifically, with the Agreement on Subsidies and Countervailing Measures (ASCM). The scope of this paper is limited to Articles 1, 2, 3, 5, 6, 8 and Annex 1, to increase the nuance of the findings. First, this article will briefly introduce the Chinese market for electric cars and its numbers, which demonstrates the success of the industry. Second, the national and regional measures for subsidizing the electric car market in China are examined closely. Third, WTO law on subsidies, the ASCM, is considered, focusing on Articles 1, 2, 3, 5, 6, and 8 and Annex 1. Fourth, an analysis is conducted concerning the compatibility of the Chinese subsidies with WTO law, the articles and annex introduced in the previous section. Lastly, a conclusion is drawn on whether the Chinese policies are consistent with ASMC’s principles and whether the Chinese automobile success story is legitimate from this legal perspective.

  1. NEV Market in China

Only a few years ago the gas pumps at petrol stations in Shenzhen or Shanghai were packed with consumers and the waiting lines to fill up your car were significantly longer than now. There may be several reasons for this, such as the rising cost of gas or it becoming more common to use a car or ride-sharing services such as Didi.[9] However has played a role in cutting the queues at the stations or in the growing number of Didis is the increase of electric cars. To demonstrate why the Chinese electric car market was chosen as the subject of this article, which is that as the largest market in the world, it also can have arguably the biggest impact on international trade, are numbers examined.

The Chinese NEVs market is economically exceptional on a global scale, making the spread of Chinese electric cars to other markets around the globe significant. In regard to numbers, 21% of cars produced in China in 2022 were fully electric, whereas 8% were hybrid.[10] That means that nearly one-third of the cars produced were dependent on electricity. The country is expected to produce approximately 13 million NEV in 2023, which is substantially more than the world’s second-biggest producers the United States and Germany with their 4 million each.[11] In fourth place is Japan and its 1,5 million, which already lags significantly behind China. [12] With also the zero-Covid policies in the past slowing down the markets, Chinese electric car sales, and thus also their production, may grow unexpectedly fast.[13] The country’s target of electric cars making up 20% of the total sales of cars in 2025 has also already been reached as electric cars made 25% of the total sales in 2022.[14]

Concerning exportation, more than a dozen chairmen and chief executives of Chinese car manufacturers operating in the electric car industry said in late 2022 that they plan within a year to launch in new markets, such as in the EU.[15]In 2021, China exported more than half a million cars abroad, when its national production remained at 2,9 million, which is 10 million short of the expected number for 2023.[16] What can be derived from these numbers is that the Chinese electric car industry has been a success by far. Furthermore, the magnitude of the industry reveals that it can generate and likely has generated notable economic impact internationally. Before analyzing if this international impact should be of concern to the WTO, are the sources of this triumph, the Chinese NEVs policies, examined next.

  1. Chinese NEV Policies

One of the underlying reasons China became the electric car powerhouse Xi Jinping wanted it to be is due to the policies considering NEVs. In this section are different subsidy types granted on the national and local level to boost the Chinese national electric car market as well as other linked measures.

Setting the foundation for the number of policies recently introduced is the New Energy Vehicle Industry Development Plan (the Plan),[17] which was first issued by the State Council of the People’s Republic of China in 2012[18] and it set forth a long-term plan for the development of the NEVs. First the Plan was agreed to run until 2020 but it was later extended to last up to 2035.[19] Furthermore, to provide guidance, the Plan entails four principles, which are: market-led development, innovation-driven development, coordinated promotion, and open development.[20] The Plan also does not only focus on the private sphere but also on the public. For instance, it states that in 2025 80% of public transportation in major cities in China should use new energy sources as their power source.[21] Interestingly, the policies aiming to boost the electric car market in China started prior to 2012, when the document was published.[22] Thus, the Plan was not the starting point but is a unified source for authorities to understand national policies.

The NEVs policies under scrutiny in this paper may be divided into four different categories, as certain measures address the provider and/or the recipient of the vehicle, and some measures are imposed by the national government whereas some by the regional or municipal ones. These measures combine the main types of measures adopted in China during the last 15 years or so.  They have affected the electric car market to the extent that they were to be chosen for the analysis of this article.[23]

First, since 2001,[24] the central government of China, as well as several regional and municipal governments, have granted subsidies for NEV manufacturers.[25] The state’s strategy involved initially providing subsidies to a wide range of NEVs manufacturers. Subsequently, these incentives were gradually scaled back or withdrawn, depending on the manufacturers’ individual performance.[26] For the central government subsidies, there were two phases in which a company could receive financial support. In the first phase, the sole requirement for receiving the funds was that the manufacturer produced NEVs.[27] In the second phase, the quality of the product was examined as well as a standard for the allocation, eliminating certain companies from the subsidy’s recipient list.[28]

One aspect is the generous research and development (R&D) subsidy programme by the state. Most of the leading manufacturers of cars in China joined the production of electric vehicles during the past two decades and received substantial capital particularly for R&D through different programmes of the central government.[29] The R&D subsidies have been granted for example to fund higher technical standards for the products or generally to carry out technological innovation.[30] Such terms as “power battery technology” and “production research” appear in most of the documents granting subsidies.[31] However, not all subsidies are granted from the central government, but also by local ones. A great illustrative example is the 600-million-yuan subsidy given by the Xi’an Hi-tech Industrial Development Zone from the new energy vehicle marketing incentive fund to BYD, one of China’s leading automobile companies, in 2018.[32] During the same year, Taiyuan Automobile also received a stimulus of nearly 363 million yuan allocated by the Management Committee of Shanxi Transformation Comprehensive Reform Demonstration Zone.[33] Altogether, NEV’s manufacturers have received substantial economic benefits from the subsidies granted by different public authorities. For instance, solely BYD Automobile Co. Ltd received 2.3 billion yuan in 2018 in subsidies from the authorities.[34] To sum up, a number of NEV manufacturing companies in China have received significant subsidies from public authorities based on performance.

The second subsidy category is the subsidies for buyers of NEVs, the so-called purchase subsidies. These subsidies have varied in amounts depending on what type of electric vehicle was in question, for instance, higher subsidies were provided for electric vehicles with longer ranges.[35] These subsidies at the national level could go up to 60,000 yuan to electric car buyers.[36] To illustrate further, in 2017, consumers received 53 billion yuan in NEV promotion through these schemes from the national government.[37] The national buyer’s subsidy scheme was set to end in 2020 but was extended due to the global pandemic until 2022.[38] However, China’s central government has gradually cut national subsidy schemes for buyers.[39]

The subsidies for buyers do not or did not solely come from the national level but also from regional and municipal authorities as well. Such subsidies have been offered by cities, such as Shenzhen and Shanghai. For example, in Shanghai, “consumers will continue to receive rebates of RMB 10,000 per car for any trade-in of internal combustion vehicles for EVs until June. 30, as part of a stimulus package aimed at propping up the local economy”[40], on the other hand, Beijing “will continue a subsidy to reward those who trade their gasoline cars in for EVs. Owners who de-register internal combustion engine cars that are one to six years old can receive 8,000 yuan, while those who replace internal combustion engine vehicles older than six years get 10,000 yuan”[41] and the city of Zhengzhou will be “offering around 150 million yuan of vouchers starting at the beginning of this year for residents who buy EVs. People can get vouchers between 4,000 and 6,000 yuan.”[42] In most cases, the amount corresponding to the reduced sales price for the customer is paid to the NEVs manufacturer.[43] Furthermore, it is important to notice that the origin of the car in question is irrelevant as a factor affecting the possibility of receiving the subsidy from the public authority, at least based on the schemes discovered for the study of this paper. Such can be noticed, for example, from the policy of the Shenzhen Municipal Bureau of Industry and Information Technology that offered a purchase subsidy for NEV in China, is it a BYD or Tesla.[44] The measures adopted by regional and municipal governments demonstrate how the subsidy scheme still takes place in China for buyers, despite the national government slowing down. It is also not out of the question that some of the national measures or similar to those are reintroduced in the near future as the sales of electric cars have slightly gone down since the measures were dropped.[45] The current NEVs market in China is now more market-driven than it was during the past 10 years as the significant cutting of subsidy schemes demonstrates and the implementation of a “dual credits”[46] system.[47] Yet some subsidies, such as the ones mentioned above, still exist and the market keeps growing.[48]

The third kind of subsidy observed is the state granting tax benefits for NEV purchasers. Providing such measures to accelerate the growth of the NEVs market started in 2010 with the other purchase subsidies. Notably, since January 1st, 2023 no more subsidies have been granted for persons acquiring an electric vehicle in China on the national level, besides a tax exemption of 10% at purchase, which has been in place since 2014.[49] Other measures by the local public authorities to promote the electric car market have included limiting license plate restrictions for electric cars that determine how many cars one can register a year, subsidizing construction of charging infrastructure for the vehicles, and introducing a sales quote.[50]

The fourth and last measure type examined is the NEVs sales quota set up by the central government. The strong impact this policy has had on the Chinese NEVs market is why it was chosen as a measure to further consider in this article. Chinese manufacturers have dealt with quotas since 2019 when 10% of their production volume had to be NEVs.[51] The relative number was 12% in 2020, 14% in 2021, 16% in 2022, and now in 2023 it is 18%.[52] These policies discuss percentages, but for the manufacturer, the government created a points system based on them. More precisely “a points system where points are awarded according to a complex formula based on production levels, taking into account factors such as energy efficiency and range. Negative points from combustion engines must be made up with positive points.”[53] This enabled a similar system to carbon emission trading, where car manufacturers in China may trade these points with each other.[54] This is called a “dual credits” system, since a car producer who fails to meet the requirement set by the quota may buy credit from other manufacturers that are exceeding the quota.[55]

Notably, other forms of subsidizing the Chinese NEVs market also exist, but are not considered in this paper to limit the scope and due to the lack of publicly available information. These measures would have included financial benefits for NEV manufacturers such as preferential tax treatment and government procurements preferring NEVs according to Guiding Opinions on Accelerating the Popularisation and Application of New Energy Vehicles.[56]

Before analyzing the policies presented above from a legal perspective, the relevant WTO rules are introduced.

  1. WTO Law and Subsidies

The starting point of modern international rules on trade is considered to be the General Agreement on Trade and Tariffs or GATT created in 1947.[57] The legal agreement was almost 50 years later, in 1995, replaced by an organization called the World Trade Organization, under which the GATT remained as a foundation for a number of rules.[58] Today, 164 states are part of this organization, amongst them China since 2001, that have agreed to adhere to the rules set by the institution.[59] Furthermore, breaches may have adverse effects, such as increased tariffs or obligation to pay compensation, or they can instigate trade wars and other financially harmful events. Hence, the incentive to follow WTO rules is usually strong.

Regarding subsidies, the relevant part of WTO law is the Agreement on Subsidies and Countervailing Measures (ASCM) which supplemented the Agreement on Interpretation and Application of Articles VI, XVI, and XXIII of the GATT. [60] The ASCM consists of 32 articles out of which Articles 1, 2, 3, 5, 6, and 8 as well as Annex 1 are relevant for the analysis of this paper.

The ASCM Article 1 established the concept of a subsidy.[61] It defines that a financial contribution has been given by a public authority, such as the government, and that there is a benefit conferred from this action.[62] The Article also mentions several other specifying conditions, for example, “government revenue that is otherwise due is foregone or not collected”, such as fiscal incentives like taxes.[63] Furthermore, the Article introduces the criterion of specificity, which determines whether the measure in question is to be treated as a prohibited subsidy (ASCM Part II), actionable subsidy (ASMC Part II), or under countervailing measures (ASMC Part V).[64] Moreover, allowed subsidies, that is, non-actionable subsidies, fall under Part IV of the ASMC. Importantly, the ASCM does not distinguish between goods intended for export or domestic sale regarding the evaluation of whether a subsidy is actionable or not.[65]

Article 2 elaborates on what is considered specific under the ASMC. Explicit limitations to certain enterprises or industries are specific, as are subsidies for designated geographical regions.[66] Objective criteria with automatic eligibility and adherence are not specific neither are generally applicable tax rate changes.[67] Other factors may indicate specificity, such as limited use by certain enterprises or disproportionate amounts.[68] To prove specificity, there needs to be clear substantiation with positive evidence under Article 2.[69]

Article 3 sets forth the subsidies that are prohibited. This includes “subsidies contingent, in law or in fact,[70] whether solely or as one of several other conditions, upon export performance, including those illustrated in Annex I” and “subsidies contingent, whether solely or as one of several other conditions, upon the use of domestic over imported goods.”[71] Annex 1 lists 12 different cases, which include (a) export-contingent subsidies, (b) currency retention schemes or export bonuses, (c) favorable internal transport and freight charges for exports, (d) provision of imported or domestic products/services at more favorable terms for exports than for domestic consumption, (e) exemption or remission of direct taxes or social welfare charges related to exports, (f) special deductions directly related to exports in calculating corporate income tax, (g) exemption or remission of indirect taxes on exported products exceeding those for domestic consumption, (h) exemption, remission, or deferral of prior-stage cumulative indirect taxes on inputs used in exported products, (i) remission or drawback of import charges exceeding those on imported inputs used in the production of exported products, (j) inadequate premium rates for export credit guarantee/insurance programs, (k) granting export credits at rates below the actual cost or payment of credit-related costs for exporters and, (l) other charges on the public account constituting export subsidies.[72]

Article 5 considers adverse effects, which the subsidy should not bring to other member states, which include injury to domestic markets, obstructing benefits to others, and prejudice to interests.[73] Article 6 explains in detail the serious prejudice part of Article 5 (c).[74]

Article 8 describes subsidies that are non-actionable, that is, allowed under the document.[75] This includes, for instance, non-specific subsidies determined by Article 2, but also certain specific subsidies that entail research-affiliated activities, regional development projects, and assistance related to adapting to new environmental rules.[76]

In the following part, the Chinese NEVs measures are evaluated under the abovementioned ASCM treaty.

  1. Analysis of the Chinese NEVs Measures under ASMC

The Chinese subsidies introduced under section III were divided into four sub-parts, subsidies directly granted to the NEV manufacturers, purchase subsidies, consumer tax benefits, and the sales quota, which are analyzed one by one under the ASCM convention.

The first type of measure is the subsidies granted to NEV manufacturers by the central government or other public bodies either based on R&D and/or merely on the delivery of goods and their quality. These measures involve a public authority, either the central government or a regional or municipal one as the granting party, as required by the ASCM Article 1. Moreover, there is a financial contribution present in these cases, as money is directly transferred from the public funds to the recipient, for example, in the mentioned BYD case. Regarding the requirement of a benefit being conferred, the WTO case on Australia – Subsidies provided to producers and exporters of automotive leather from 1999 defines a benefit as “a favorable or helpful factor or circumstance; advantage; profit”.[77] Such benefit is present in these measures as the grantors of the subsidies do not request the financial contribution to be paid back. Thus, this first type of measure is a subsidy under the definition of ASCM Article 1. To establish if these measures are to be dealt with under which article of the ASCM next, the specificity criterion of Article 1.2 is applied.

Under Article 2, the measures at hand are considered as specific as the subsidies were granted for explicit enterprises or industries with no automatic eligibility. The subsidies were given to manufacturers of NEVs, in the name of promoting the NEVs industry, that is, to receive the subsidy, the company had to be manufacturing NEVs vehicles. In addition, in some of the cases, the producer also had to produce goods or NEVs that are of certain quality that the central governments approves to remain or become an automobile company, which receives subsidies. The great amounts also allocated to companies like BYD and Taiyuan Automobile are likely amounts that are considered to be disproportionate as in exceptionally high subsidies, despite the fact that China is an affluent country capable of executing financially expensive operations. This further strengthens the case for specificity. As specificity is established, the next analysis is if the measures are prohibited under ASCM Article 3.

These subsidies are not tied to exportation performance nor are they in the list of measures under ASCM Annex 1. Considering the “in fact” part, these companies, based on the information made available for this paper, do not rely on exportation and it is argued that China’s intention was not to increase exports. This leads from the fact that Chinese NEV manufacturing was, when the granting of the subsidies occurred a decade ago, rather undeveloped, and other states have been stimulating their NEV markets in similar ways, meaning that exportation was a consideration further in the future only.

Regarding Article 5 on adverse effects and if the measures are actionable, other Member states have not reported the subsidies in question as harmful to them or as violating their interests.[78] Thus, also Article 6 which elaborates on the serious prejudice of Article 5(c) is not applicable.

Article 8 sets the criteria for specific subsidies that are allowed. The aim of the granted subsidies was to promote the NEV market by pushing for technological innovation, as, for instance, the terms “production research” and “power battery technology” development demonstrate. Moreover, the Plan, the main guiding document for the granting authorities, also names the main goal to develop this industry. Hence, these measures do likely fall under the category of research-affiliated activities, more specifically under industrial research, and, in certain cases, even assistance related to adopting new environmental rules (Art. 8 (2a)) as the Chinese government was pushing for, for example, more sustainable public transport system by introducing electric vehicles to it. However, the subsidies could only to a certain extent cover the costs of the research, but these calculations fall outside the scope of this paper. Hence, the first measure of subsidies granted to NEV manufacturers by the central government or other public bodies either based on R&D and/or merely on the delivery of goods and their quality are subsidies within the meaning of ASMC and allowed as specific subsidies under Article 8.

The second type of measure under scrutiny is the purchase subsidies when buying an NEV vehicle. In this case, as in the case above, public authorities, either national, regional, or municipal have granted financial aid to consumers purchasing electric vehicles. It is important to note, that in some cases the subsidy is given as a voucher as in Zhengzhou but in most cases, the party granting the subsidy gives the corresponding amount of the sale price to the NEVs manufacturer. Thus, a financial contribution occurs in either case, and the free source of capital constitutes a benefit for the recipient. Hence, these types of measures are subsidies within the meaning of ASCM Article 1.

Regarding specificity under Article 2, there is an objective criterion to acquire the benefit as any person, in theory, may buy an electric vehicle and enjoy the subsidy. This is stronger in the case of vouchers, as the person receiving one may use it as wanted. This measure indirectly encourages a person to purchase an electric car as the granting of one is contingent on the acquisition. In the case of the lowered sale price, where the public authority compensates the seller, is the case more clearly linked to a specific industry, as with vouchers other industries benefit more directly as well. Consequently, there is room to argue for the measure not being specific, which would mean the subsidies are allowed as such, but also room to argue for specificity.

Assuming specificity, the prohibition under Article 3 is to be considered. The subsidy scheme is not prohibited under Article 3 as it does not focus on exports nor is it contingent on certain performances linked to exportation, nor is there any preferential treatment to domestic goods over imported ones. Only a far indirect link to exportation could be supposed, such as in the case of the first measures analyzed above. Hence, the purchase subsidies would not be prohibited under Article 3.

Moreover, there are no direct adverse effects to markets outside of China, at least not serious enough, neither are these actions targeting other Members’ interests to a serious extent, as the subsidy focuses on electric vehicles in China, within the borders of the state. Therefore, Articles 5 and 6 do not apply.

There is also slight room under these types of subsidies to argue for sustainable action or even development projects under Article 8, similar to the first type of measures above, but the genuine aim appears to be financial looking at the numbers of the NEVs industry after the subsidies were granted but also indirectly encouraging R&D as a developing industry. The greatest beneficiaries are the NEVs industry, more indirectly, and the consumers, directly.

The indirectness might give lenience, and in this sense speak for allowance of the measure. However, with a certain industry benefitting greatly from the subsidy, and the target of the subsidy being boosting the NEVs market, the measure could be contested. Such measures should be analyzed case by case, instead of bundled together as one type for a definitive answer. Notably, most of these schemes have, at least for now, ended, making the likely problems arising from these schemes in China less likely.

The third type of measure is tax breaks given to customers buying NEVs. A public authority, the state, grant the tax partial exemption to the consumers, as included in the subsidy definition of ASMC Article 1. The consumers also receive financial contributions, tax breaks are explicitly mentioned under Article 1 of the ASCM as a form of subsidy. Such is also conferring a benefit for the consumer, who may now pay a lower price for the good.

Regarding whether the tax break is specific under Article 2, it is argued that the subsidy is specific to NEV manufacturers despite being given to the customer, which is specific to a certain industry. In theory, the tax break is accessible to any individual able to purchase the NEV, which may extend to any NEV manufacturer as well. Therefore, the tax rate change is applied universally. This generality means the action would not be specific and, therefore, allowed as such under the ASMC. As mentioned, these subsidies were still effective, at least until the end of 2023.

The fourth and last type of measure reviewed is the sales quota set to NEV sellers by the Chinese government. However, the measure does not involve any government financial contribution, solely the government sets up a system that allows trading. It is true, that a company may receive financial benefits from this action, but in that case the wealth is transferred from another NEVs seller for “quota space”, not from the state. Thus, this action lacks the qualities to satisfy the definition of a subsidy under ASMC Article 1 and, therefore, is not against the principles of the ASMC.


  1. Conclusion

In conclusion, the Chinese NEVs market has had a remarkable growth sprint during the last 10 years. The list of reasons explaining this trend is much longer than addressed in this paper. However, undeniably some of them are the four types of measures presented, which follow the goals set by the government in the New Energy Vehicle Industry Development Plan 2035. The reason most of the measures have been already dropped, likely was not because they did not achieve the goals wished for, but for exactly doing that. Now China is heading towards more market-oriented measures like the “dual credit” system to push for the development of the NEVs industry in the country.

The notable success of the Chinese NEVs market has drawn attention around the world and Chinese electric vehicles are arriving on the streets around the globe. The market significance also means it affects international trade, which is governed by the WTO. Consequently, this paper was dedicated to addressing specific inquiries raised by the ASCM treaty, part of the WTO documents. The four types of measures promoting the Chinese NEVs market were analyzed under multiple parts of the ASCM. The first measure analyzed regarding subsidies directly allocated for the NEV manufacturers can be considered allowed under Article 8 of ASCM as measures that aim to promote R&D and environmental transition. The second type was the purchase subsidies, which can be a source of contestation under the ASCM due to the ambiguity in the specificity of these measures. However, as they do not distort markets outside China or treat imported electric vehicles any differently from domestic ones based on the material scrutinized for this paper, it is unlikely that this type of measure will be a source of concern for the state, especially with most of them already being history. The third measure placed under ASCM scrutiny was the tax benefits provided for NEV vehicle purchasers. Despite being explicitly mentioned as a specific type of measure in the ASCM, the objectivity and generality of the measure do push for allowance under the treaty. Nevertheless, with both the purchase subsidies as well as the tax benefits, case-by-case study of each specific measure would be needed to provide a definitive answer to their acceptability under the ASCM principles. Lastly, the sales quota was analyzed and deemed not to fall under the ASCM as a measure not fulfilling the definition of a subsidy under Article 1. Yet, the measure was included since it has played a crucial role in the development of the Chinese NEVs market and for including financial aspects beneficial to certain enterprises. Importantly, this paper only considered a certain set of subsidies that are or have been in place in China to boost its NEV market. Thus, the conclusion reached only applies to these specific measures and the available information on them.

All in all, as the presented numbers point and the result of the four analyses, China is on the path to becoming the powerful automobile country Xi Jinping wishes it to be, if it is not one yet, and the ASCM will definitely not stop this from happening.

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  1. 习近平:发展新能源汽车是迈向汽车强国的必由之路. 习近平:发展新能源汽车是迈向汽车强国的必由之路-新华网. (n.d.). 
  2. Speech by Xi Jinping, the President of the People’s Republic of China, at the 75th session of the United Nations General Assembly on September 22, 2020.
  3. (Zhang, Y., Ji, Q., and Cao, X., 2019, p. 1229).
  4. (Lu, J., and Wang, Y., 2020, p. 121481).
  5. Chinese electric vehicle brands.
  6. (Krolicki, K., 2023). 
  7. Chapter VIII Safeguard Measures in the Energy-Saving and New Energy Vehicle Industry Development Plan 2035.
  8. (WTO, n.d.a)
  9. (Mensah, I.K., et al., 2019, pp. 1-16)
  10. (Luman, R., and Pang, I., 2023, para. 9). 
  11. (Carlier, M., 2022). 
  12. Ibid.
  13. (Luman, R., and Pang, I., 2023, para. 4)
  14. (Mandal, S., 2023)
  15. (Xu, B., and Lin, B., 2018, pp. 191-204); (Anderson, B., 2023).
  16. (GlobeNewswire News Room, 2023).
  17. The legal document from the State Council next to previously mentioned Xi’s speeches provide guidance for governments on different levels and hold great authority, making the emergence of NEVs policies, especially around 2014-15, the expectable. To become the electric car powerhouse the state desired to be, the rather vague Plan included five strategic measures to be taken: “improve technological innovation capacity; build a new industrial ecosystem; promote integrated industrial development; improve the infrastructure system and deepen opening-up and cooperation.” See (IEA, 2022).
  18. (State Council of the People’s Republic of China, 2012).
  19. (Liu, C., and Zhou, L., 2021, p. 6727).
  20. (Ibold, S., Yun, X., and Shuyue, X., 2021)
  21. Ibid.
  22. (Zhang, X. and Bai, X., 2017, pp. 24-43).
  23. (Wang, S., Li, J. and Zhao, D., 2017, pp.14-26); (Li, J., Jiao, J. and Tang, Y., 2019, pp.1-12).
  24. See National High Technology Research and Development Program, or the 863 Program.(Jiang, C., et al., 2018, p.1691).
  25. (Yang, T., Yuan, Z. and Xing, C., 2023, pp.3351-3377).
  26. Ibid. 
  27. Ibid. 
  28. Ibid. 
  29. (Jiang, C., et al., 2018, p.1692).
  30. (Yang, T., Yuan, Z. and Xing, C., 2023, pp.3351-3377).
  31. 比亚迪等新能源车企们真的是靠政府补贴活着吗? 知乎专栏. (2020).
  32. Ibid.
  33. Ibid.
  34. Ibid.
  35. (Lew, L., 2023).
  36. Ibid. 
  37. (比亚迪等新能源车企们真的是靠政府补贴活着吗? 知乎专栏, 2020).
  38. (Shi, L., Wu, R. and Lin, B., 2023, p.125423).
  39. (Zhang, X. and Bai, X., 2017, pp. 24-43).
  40. (Shen, J., 2023) 
  41. (Lew, L., 2023)
  42. Ibid.
  43. (Zhang, X. and Bai, X., 2017, pp. 24-43).
  44. (图解:《深圳市促进新能源小汽车消费补贴申领实施细则》政策解读. 政策解读–深圳市工业和信息化局, n.d.).
  45. Ibid.
  46. A trading system regarding NEVs quotas for manufacturers. Introduced in detail later.
  47. (Yang, Z., 2023).
  48. Ibid.
  49. (Mengnan, J., 2023); (Interesse, G., 2023).
  50. (Song, Y., et al., 2020, p. 104927).
  51. (Hampel, C., 2020).
  52. Ibid.
  53. Ibid.
  54. (Yang, Z., 2023).
  55. Ibid.
  56. (Guiding Opinions on Accelerating the Popularisation and Application of New Energy Vehicles, 2014).
  57. (Dos Santos, N.B. and Cunha, R., 2005, pp. 637-670)
  58. Ibid.
  59. (WTO, n.d.a)
  60. Ibid.
  61. Art.1, Agreement on Subsidies and Countervailing Measures, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, 1869 U.N.T.S. 14.
  62. Art. 1.1, ibid.
  63. Art. 1, (a)(1)(i-iv), ibid. That is:(i)  a government practice involves a direct transfer of funds (e.g. grants, loans, and equity infusion), potential direct transfers of funds or liabilities (e.g. loan guarantees);(ii)  government revenue that is otherwise due is foregone or not collected (e.g. fiscal incentives such as tax credits);(iii)  a government provides goods or services other than general infrastructure, or purchases goods;(iv)  a government makes payments to a funding mechanism, or entrusts or directs a private body to carry out one or more of the type of functions illustrated in (i) to (iii) above which would normally be vested in the government and the practice, in no real sense, differs from practices normally followed by governments;
  64. Art. 1.2, ibid.
  65. Art. 3.
  66. Art. 2 (2), ibid.
  67. Art. 2 (2.1c), ibid.
  68. Art. 2 (2), ibid.
  69. Art. 2 (4), ibid.
  70. “This standard is met when the facts demonstrate that the granting of a subsidy, without having been made legally contingent upon export performance, is in fact tied to actual or anticipated exportation or export earnings. The mere fact that a subsidy is granted to enterprises which export shall not for that reason alone be considered to be an export subsidy within the meaning of this provision.” Art. 3(a), ibid.
  71. Art. 3, ibid.
  72. Annex 1, ibid.
  73. Art. 5, ibid.
  74. Art. 6, ibid.
  75. Art. 8, ibid.
  76. Art. 8(1-2), ibid.
  77. (Panel Report, 1999, p. 42).
  78. (WTO, n.d.b).
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