EconAir

    This is a case study of one country’s relationship with private companies in a major industry.   The central government has made the production of EVs a national priority with massive subsidies. The provincial, county, and local governments compete to attract an EV assembly plant. All levels of government entice new companies with a wide range of incentives and subsidies. The result is that in a short period of time about 100 new plants have been built; a few new ones are planned. The industry may have a total capacity of around 25-30 million cars.    Current production was 12.4 million cars in 2024; 2025 will probably be higher. Growth rates in the future will probably be lowered than in the past.   This is a common pattern for a new technology. In the United States, about 500 companies intended to produce cars. The difference with the current Chinese program is that most didn’t start production or produced very few cars. Only a few companies built a p...

  INTRODUCTION According to the World Bank, China's Gross Domestic Product (GDP) was $18.7  trillion in 2024, compared to $29.2 trillion for the United States. China's economy was 64% the size of the American economy; a generation ago, in 2000, China's GDP was only 12% of America's. China has been a spectacular economic success story.  China has increased its share of global manufacturing from 6% in 2000 to 32% in 2024.  Manufacturing makes up 28 percent of China’s economy, compared with 11 percent in the United States. China sees it dominance of interrelated advanced technologies as key to its geopolitical global dominance of the United States. THE BEGINNING OF CHINA'S ECONOMIC RISE After the death of Mao in 1976, a more pragmatic group of Communist leaders seized power and began to change China. Their model was Singapore, whose population was mostly Chinese. Singapore’s economic growth model was that the dominant political party would direct economic growth. It in...