Liu Junhong: The U.S. crackdown on Chinese batteries reflects a problem
Straight news: The United States has issued new rules that make American electric vehicles that use Chinese-made or assembled battery components will no longer be eligible for tax credits. What are your observations on this?
Liu Junhong, researcher at the China Institute of Contemporary International Relations: In order to limit the market share of Chinese battery-related companies in the United States, the $7,500 government subsidy will be removed for electric vehicles produced in the United States if they use parts that the United States considers to be "economies of concern".
Despite some regulations, the so-called "economies of concern" include other countries such as China and Russia, but in general, China has a large market share in the field of components, especially for electric vehicle batteries. For example, CATL basically controls the battery supply of most of the world's electric vehicle manufacturers, which means that China has an absolute advantage in the field of batteries for electric vehicle production. If you look at it this way, this so-called new regulation is actually a measure directly aimed at Chinese battery manufacturers.
On the other hand, the new measures of the United States also stipulate that from 2025, relevant countries, that is, these "economies of concern", will also be restricted in the extraction and production of minerals. Starting in 2024, it will be a restriction on battery parts for automobiles, and from 2025, it will be a restriction on related minerals. These restrictions are all aimed at China and are mainly aimed at China.
Straight News: In contrast, the world's first national exhibition with the theme of supply chain - China International Supply Chain Promotion Expo closed in Beijing on the 2nd, providing cooperation opportunities including the electric vehicle industry. If you look at the two very different attitudes of China and the United States on the issue of production and supply chains, and how will this affect the trend of globalization?
Liu Junhong, researcher at the China Institute of Contemporary International Relations: From this point of view, we are actively adopting the form of international cooperation, especially in the fields of industrial chains, production chains, and supply chains, to strengthen global cooperation and promote globalization.
And the measures taken by the United States are to protect its own industry and protect some of its own and allied industries. In other words, in the relevant field, an active competition policy is adopted, weakening the other side and preserving its own basic routine. If you look at it this way, it should be a mercantilist approach.
Therefore, looking at it now, the so-called globalization path taken by the United States is completely different from the globalization path we are taking. Our path to globalization should be an open, fair, and mutually beneficial mode of production and marketing.
The measures taken by the United States are to actively promote those that are beneficial to it, and to restrict production methods that are unfavorable to the United States or that are beneficial to competitors. Therefore, in the past, it should be said that the United States actively promoted globalization, but now it is the United States that is actively preventing globalization. The process of globalization has been frustrated, mainly by the United States.
Straight News: We noticed that U.S. Secretary of Commerce Raymond still said on the 2nd that he refused to cooperate with China in the field of cutting-edge semiconductors. From sabotaging industrial chains to high-tech suppression, have these US practices under the pretext of "competition" violated the consensus reached by the two heads of state? What impact will it have on Sino-US relations, which have stopped falling and stabilized?
Liu Junhong, researcher at the China Institute of Contemporary International Relations: It should be said that some of the practices and thinking of the US Department of Commerce run counter to the basic principles of cooperation put forward at the talks between the two heads of state.
If you look at it this way, the U.S. Department of Commerce actually represents some low-level interests related to the U.S. industry. The direction of cooperation at the high-level political level has actually been indicated by the two heads of state. Looking at it now, the U.S. Department of Commerce has a self-interest consideration. Therefore, on the whole, some policy measures such as the US commerce department still maintain a basic approach of competition and friction.
Straight News: According to Bloomberg, US House Speaker Mike Johnson has refused to impose restrictions on investment in China in the National Defense Authorization Act. McHenry, chairman of the House Financial Services Committee, also strongly opposes the creation of broad investment restrictions. What do you think of the differences and games in the U.S. political arena regarding trade and restrictions on China?
Liu Junhong, researcher at the China Institute of Contemporary International Relations: Generally speaking, trade and commercial competition and scientific and technological competition basically reflect the contradictions in US domestic politics, that is to say, domestic politics is actually a very fierce struggle, not only between the two major political parties, but also between various interest groups. Viewed in this way, some of its policies toward China actually reflect the different views and practices of the ruling party and those in the opposition on China's policy. What is actually reflected are the different interests within them.
Therefore, from this point of view, the U.S. commercial and trade policies and science and technology policies toward China themselves reflect the deep-seated contradictions between U.S. domestic affairs. Therefore, we also need to be vigilant and take precautions.
Liu Junhong is a researcher at the China Institute of Contemporary International Relations