Last year, leading Chinese battery manufacturer Contemporary Amperex Technology (CATL) ranked among all listed companies in China receive the most government subsidies. This emerges from data compiled by the Chinese information provider “Wind” and evaluated by “Nikkei Asia”.
Accordingly, CATL received 5.72 billion yuan (725 million euros) last year, more than twice as much as the year before. The Shenzhen-listed company did not disclose what it used the money for in its latest annual report and did not respond to queries from Nikkei Asia.
CATL’s ranking also shows the Chinese government’s changing focus: for a long time, the list of state-sponsored companies in China was dominated by oil companies. If you go back to 2012, when Xi Jinping (70) took the helm as general secretary of the Chinese Communist Party, the top recipients for years were either Sinopec or PetroChina. Beijing is now focusing on the technology sector; four of the ten largest subsidy recipients are electric mobility providers, according to the data.
According to the report, SAIC Motor, one of the country’s largest automobile manufacturers, is also on the recipient list. The company received more than 4 billion yuan (507 million euros) in subsidies in 2023, an increase of 11 percent year-on-year. Another major recipient of subsidies is the electric car manufacturer BYD. The company received 2.18 billion yuan (276 million euros) in 2023, 28 percent more than the year before.
Europe and the USA skeptical
The ranking comes just before the expected conclusion of a European Commission investigation into government support for China’s electric car industry. Commission President Ursula von der Leyen (65) initiated the investigation in September 2023 because, from the EU’s perspective, China was keeping the prices for its electric cars artificially low with “enormous state subsidies” and so the World market “flooded” with cheap cars. This distorts the market.
US President Joe Biden (81) announced last month that it would increase tariffs on Chinese electric cars to 100 percent, using the same reasoning. The battery partnership between the US automobile manufacturer ford and CATL is already being heavily criticized in the US given its strong government support.
Hungary as a back door to the European market
A study from the Mercator Institute for Chinese Studies
suggests that China is already working to circumvent possible EU tariffs. According to this, a total of 44 percent of all Chinese direct investments in Europe flowed to Hungary last year. “The Eastern European state attracted more Chinese investment than the three major economies of Germany, France and Great Britain combined,” it said. Chinese companies in Hungary are investing primarily in the e-mobility sector. Last year, these accounted for two-thirds (69 percent) of China’s direct investments in Europe.
Hungary has developed into an important trading partner for China under right-wing Prime Minister Viktor Orbán (61). It is therefore pursuing a significantly different strategy than other EU countries such as Germany, which want to reduce their dependence on China.