CHINA'S SURVIVAL IS BY KILLING EVERYONE | Ep- 1492 | Sumeet Jain
How China’s Hidden Subsidies Are Taking Over the World Economy – and Why India Must Fight Back!"
Introduction: The Shadow War on the Global Economy
China is not just competing in the global marketplace; it’s waging an economic onslaught. By disguising enormous subsidies as “tax rebates” and flooding the world with cheaper electric vehicles (EVs), solar panels, and semiconductors, Beijing has weaponized its industries. And India, alongside the rest of the world, is reeling from this export invasion.
China’s approach? Create monopolies in strategic sectors, drive foreign competitors out, and establish Chinese dominance. In the process, the U.S. and Europe are already raising tariffs and shouting foul play. But while they fight back, India stands at a crossroads: should we continue to play by China’s rules or take a stand to defend our own industries?
The Reality of "Hidden" Subsidies: How Beijing Outsmarts the World
Over the last decade, China’s tax rebates have soared an astonishing 400%, with strategic industries reaping enormous rewards. Beijing allocates billions in “tax refunds” to fuel exports of EVs and semiconductors, placing Chinese products on every continent at prices other manufacturers cannot match. Even major players like Japan’s Nikkei have sounded the alarm: Chinese tax refunds exceed direct subsidies in scale, making China’s economic support system a colossal hidden network of trade manipulation.
Beijing claims these are ordinary VAT refunds, a standard practice around the globe. But the numbers tell a different story. While Chinese exports grew only 50% over the last decade, tax rebates have multiplied fivefold. This imbalance raises a glaring question: are these rebates actually subsidies by another name?
BYD, BOE, and SMIC: China’s Crown Jewels in the Global Takeover
Behind China’s assault on global markets are its corporate champions: BOE Technology Group, BYD, and Semiconductor Manufacturing International Corp. (SMIC). BOE, which leads the world in LCD panels, collected a staggering 60 billion yuan in rebates over five years. Meanwhile, EV manufacturer BYD – the same company vying for dominance over Tesla – amassed 37.1 billion yuan in rebates, far exceeding its official subsidies of 9.3 billion yuan. And BYD’s advantages don’t end there; it enjoys ultra-low-interest loans from state-backed banks, putting Western and Indian automakers at a serious disadvantage.
China has created not just industries but empires that no other country can easily match. Take the solar panel and LCD panel industries, where Chinese firms command the lion’s share of the global market. Now, they’re advancing rapidly in the EV and semiconductor sectors, thanks to Beijing’s bottomless pool of subsidies – hidden and direct alike.
The Loophole Exploitation: How China Sidesteps Global Trade Rules
If these tax refunds are indeed subsidies, why does the World Trade Organization (WTO) allow it? Here lies the genius of Beijing’s strategy: according to WTO rules, tax rebates aren’t classified as subsidies, and thus escape scrutiny. The WTO bars subsidies that distort international trade, but China’s tax “rebates” slip through the legal loophole, giving Beijing carte blanche to turbocharge its industries.
“Beijing is clearly trying to support strategic industries with tax rebates,” says Toshiko Sasaki, a director at PwC. And Sasaki isn’t alone in this view. The Center for Strategic and International Studies, a U.S.-based think tank, estimates that China’s support for its industries, including hidden tax rebates, exceeded $400 billion in 2019 alone. That’s more than the GDP of several countries – all directed towards solidifying Chinese dominance across sectors critical to the future.
EMAIL: Coffeewithsumeetjain@gmail.com
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