For over 100 years, Western nations have dominated key technologies in the automobile industry. This dominance has not been without cause or consequence. The cause lies in the deliberate prevention of these technologies from being mastered by the rest of the world, and the effect has been the creation of obscene profits—primarily for automotive CEOs and the top 10% of stockholders in the West.
While automobiles have the potential to significantly enhance global productivity, especially by improving mobility for the Global South where majority of the world’s population lives, it has long been treated as a luxury item. Rather than being seen as a tool for widespread economic advancement, it has been reserved as a status symbol for the wealthy. At the heart of any industrial revolution is mobility. As Jeremy Rifkin highlights in The Third Industrial Revolution, when Henry Ford mass-produced the automobile for everyday consumers, it was a major catalyst for the second industrial revolution in the United States of America.
Similarly, the mobile phone was once an object of luxury until Chinese manufacturers began mass-producing affordable versions, democratizing access for the Global South. The automobile industry is now undergoing a similar transformation. While the West continues to produce primarily for its own markets and for the wealthy, China has leveraged this technology in a way that benefits global productivity and consumption.
While the west is bent on arguing that China’s rise in the automobile sector is fueled by government subsidies, subsidies in the Western auto industry have been commonplace for years without similar criticism. The issue of overcapacity offers another striking example of this double standard and absurd reality. For instance, Germany—a relatively small country—produces over 6 million vehicles annually, with half of profits for its main brands like Volkswagen coming from China’s vast market. Yet, when China, a nation of over 1.4 billion people, produces large volumes and exports to Europe and the U.S., the West labels it “overcapacity.” This reveals a blatant and hypocritical bias.
While subsidies have indeed played a role, the real credit for China’s automotive success belongs to the hard work of the Chinese people, foresight of the Chinese Communist Party (CCP) government, and the innovativeness of Chinese companies. On the other hand, the West’s stagnation can be attributed to complacency, outdated technology, and a lack of vision by western governments—issues that cannot simply be blamed on subsidies or overcapacity. It’s important to remember that Western subsidies, especially in sectors like agriculture, continue to this day without the same scrutiny.
