China is drawing a road map for EV-fuelled growth – and wants global cooperation to oil the wheels

To guard against potential trade restrictions, maintain its status as the world’s top car exporter and transform the sector into a sustainable growth driver, China has laid out plans to widen its footprint in global electric vehicle (EV) development.

Heightened international cooperation, increasing the country’s say in standard-setting and measures to help home-grown manufacturers cope with looming export barriers are among the 18 planks listed in a document issued on Wednesday by nine state agencies, led by the National Development and Reform Commission and the Ministry of Commerce.

Beijing is optimistic that China’s freewheeling EV industry can serve as a dynamo for an economy that faces an uphill battle to achieve sustained recovery. But an overcapacity problem is weighing on the sector’s prospects, even as domestic competition intensifies.

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As companies are betting on overseas markets to sustain the EV boom, interventions from those markets’ governments could drop roadblocks on the path to dominance.

The European Union launched an anti-subsidy investigation in October, alleging Chinese EV prices were being kept “artificially low”. Last month, US Commerce Secretary Gina Raimondo also labelled China’s EVs “a risk” for information security, hinting at restrictions down the road that would open a new front for trade and tech conflict.

The new document encourages cooperation to counter these curbs, as well as protect exports. “Set up R&D centres overseas,” it said, “[and] establish strategic collaboration with foreign research institutions and industrial clusters through talent training and exchange to better help China’s EV sector to integrate.”

Exports are key for the EV industry to continue to flourish … Beijing is moving to defend its advantage

Qu Ke, CCB International

A researcher with Fudan University’s Institute of International Studies said China is anxious not to let the US and EU slam the door on EV exports and curb the country’s major growth industry.

“After all, EV is one of the very few bright spots amid an unstable economic recovery. Strategically, the sector holds promises to drive growth at home and advance tech ambitions and influence globally,” said the researcher, who requested anonymity.

China zoomed past Japan as the world’s top car exporter in 2023, shipping 5.22 million vehicles abroad, up 54 per cent, year on year, according to General Administration of Customs data. Pedal-to-the-metal EV exports, ballyhooed by state media as a new growth engine for the world’s second-largest economy, hit 1.77 million last year.

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Qu Ke, an analyst with CCB International in Hong Kong, said exports are essential to the sector’s growth.

“Exports are key for the EV industry to continue to flourish, to offset the economic drag from property sector distress and the export drag from the exodus of other production chains. Beijing is moving to defend its EV export advantage,” Qu said.

As an example, Qu said EV makers could pivot to the Middle East while localising production in Europe to reduce policy risks.

Along with cooperation, compliance and standard-setting are other priorities set out by the agencies.

Beijing seeks to promote the internationalisation of standards and specifications, including for batteries and charging facilities, and step up bilateral and multilateral recognition.

Joint efforts from ministries related to commerce, industrial production and foreign affairs were also encouraged. Those authorities, the document said, must track overseas market access, data and intellectual property laws to compile country-specific guidelines, as well as train manufacturers and exporters to fend off risks.

The agencies also stressed making use of World Trade Organization platforms and resolution mechanisms to create a “transparent and predictable environment” and safeguard global EV supply chains.

South China Morning Post