KUALA LUMPUR: China's rapid rise to dominance in the global electric vehicle (EV) market has set off alarm bells in the West.
In the first half of 2023, China captured a staggering 53% of global EV sales, a share more than double that of any other nation.
While there are certainly factors contributing to China's EV dominance, including government subsidies and a booming domestic market, the West seems to be responding with a mix of skepticism and concern.
This raises a pressing question: why is China's ascent met with unease, while the West embraced Japan's automobile industry in the 1980s?
China's Rise in the EV Market: Why the Concern?
China's dominance in the EV market goes beyond mere vehicle sales; it potentially reshapes the future of transportation, energy consumption, and environmental stewardship.
If China controls the EV market, they might also control its supply chains, from battery minerals to manufacturing, which carries significant geo-economic implications. The European Union's recent investigation into potential unfair subsidies given to the Chinese EV industry is not without reason.
There have been persistent claims of substantial state-sponsored support, which could create an uneven playing field, making it challenging for foreign competitors to compete fairly. Such interventions may distort global trade dynamics and threaten the West's economic interests.
The concerns also went beyond economics; there are genuine worries about technology and intellectual property (IP) theft. Western nations have had legitimate concerns over intellectual property theft and forced technology transfers in China.
The fear is that as China's EV industry continues to grow, the risks associated with technology and data breaches may increase, posing a threat to innovation and security.
Moreover, today's world is far more interconnected and interdependent than the 1980s. Actions in one part of the globe can have immediate ripple effects across borders.
The concerns about China's rise in the EV sector reflect broader geopolitical anxieties, spanning human rights issues to questionable trade practices.
In an era of complex global relationships, China's dominance in a pivotal industry like EVs could have far-reaching consequences on the geopolitical stage.
The Japanese Boom of the '80s: A Different Era, A Different Narrative
Japan's meteoric rise in the automobile sector during the 1980s presents a stark contrast to China's EV dominance.
Japan's success was built on innovation, efficiency, and the quality of its vehicles. Brands like Toyota, Honda, and Nissan thrived in a market-driven atmosphere, a testament to the prowess of free-market principles. This is in sharp contrast to China's EV market, often seen as relying heavily on state intervention.
The 1980s were also not plagued by the intricate complexities of digital espionage and technology theft that the world faces today.
This facilitated collaborations and made cross-border business less fraught with risks. In contrast, the digital landscape today presents new and complex challenges in fostering international cooperation and trust.
Additionally, during the 1980s, Japan was perceived as an ally of the West, especially during the Cold War era.
Their economic success was not interpreted through the lens of geopolitical threat, as is the case with China today.
The geopolitical context has shifted dramatically, and the West's response to China's ascendancy is influenced by broader concerns about the evolving global order. As the global landscape has evolved since the 1980s, and so too have the dynamics of international industries.
Japan's automobile dominance was a product of its time, marked by innovation and global alliances.
China's ascent in the EV market is a different beast entirely. It comes with the complexities of a new era, which necessitates a careful approach.
As nations navigate these waters, it's essential to foster dialogue and cooperation to ensure that progress is shared, and the West remains vigilant in safeguarding its interests and values.
The concerns about China's EV dominance should be viewed as a part of the broader challenge of navigating a changing world order.
* Ahmad Zaim Ahmad Tawfek used to assist a few Ministers in shaping the right and progressive economic, youth and foreign policies for Malaysia.
** The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the position of Astro AWANI.
AWANI Columnist
Mon Oct 16 2023
The concerns about China's EV dominance should be viewed as a part of the broader challenge of navigating a changing world order.
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