China’s EV industry policy puts institutions before champions – East Asia Forum

The standard narrative about China’s rise to the top of the global electric vehicle (EV) industry centres on ‘the state’, in the form of a monolithic national government, identifying a sector rich with opportunity and willing it into being with a determined and coordinated scheme of subsidies and other industrial support. As Fengming Lu and Xiao Ma point out in this week’s lead article, that narrative simplifies a much more complex story. The rise of China’s globally competitive EV manufacturers owes as much to fragmentation and competition among different elements of the central government, the policies of provincial and local governments and the dynamics in global capital markets at crucial points in the industry’s development as it does to coordinated state support. Central ministries, as Lu and Ma’s tracing of the industry’s emergence details, competed over regulatory authority and preferred technologies rather than following a common blueprint. The resulting policy gaps ‘sometimes created openings for peripheral businesses such as automakers Chery and Geely, policy entrepreneurs and technical experts to influence policy’, as Lu and Ma explain. Provincial governments, formally incentivised to drive local industrialisation, also learnt to become creative with centrally determined rules around support for private firms. They found
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