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China Is In Driver's Seat When It Comes To Powering Electric Cars

China has put 1 million electric vehicles in circulation
China has put 1 million electric vehicles in circulation
Laurent Horvath


LAUSANNE — While plenty of attention has been paid to Donald Trump's "America First" pledge — as troublesome or laughable as it may seem — relatively little is being said about another protectionist economic strategy, one that could have a far greater impact on Europe and the West.

Unlike the U.S. president, with his well-known habit of airing every thought and whim on Twitter, authorities in Beijing have been discreet about their "Made in China 2025" initiative. Don't be fooled though. It may not have a lot of fanfare, but this is no half-measure.

Just as China has already done with solar and wind technology, its "Made in China 2025" strategy — also known as "China Manufacturing 2025" — is a no-holds-barred plan to borrow Western know-how and then bank on it. Massively.

That means buying patents or entire companies specialized in high-tech areas such as artificial intelligence, semi-conductors, biopharmaceuticals, electric cars and energy production. It also involves applying China's particular arsenal of protectionism and market manipulation via preferential business rules and financing.

President Xi Jinping describes science and technology as "the principal economic battles' currently in play, and it's clear that — along with military muscle — this is the foundation on which China looks to build its global hegemony.

Companies such as battery manufacturers are obliged to share their know-how in exchange for the privilege of selling their products in China. And yet these companies can't resist. China has generated a huge demand for electric cars — a huge market for battery makers.

China has put 1 million electric vehicles in circulation, with another 4 million expected in the next three years. Since 2012, this sector has been encouraged with massive subsidies and changes in the law that favor local electric car manufacturers. In the space of just a few years, Shenzhen-based company Build Your Dream (BYD) has seen its market capitalization explode. BYD is now worth nearly $19 billion and it has set its eyes on Tesla, the market leader, which is worth an estimated $50 billion.

Over the past decade, the battery industry has been dominated by Japan and South Korea. But by doubling its production between now and 2020, China is looking to take the lead. The current focus is on the lithium-ion systems so cherished by automakers, with expected earnings, over the next eights years, of $40 billion. As was the case with solar energy, the Chinese strategy is to stifle the competition by offering unbeatable rates. In just a few years, solar energy prices dropped by 70%. Battery prices are already following suit.

The world's biggest supplier right now is Panasonic. On its heels, however, is the Chinese company CATL, which currently produces about 7.6 Gigawatt hours (GWh) worth of batteries per year. By 2020, it could pass Panasonic's supply and create about 20,000 jobs.

China will soon be able to produce enough batteries to power 5 million cars for 100 kilometers, according to Bloomberg. With protectionist mechanisms custom-made for the likes of companies like BYD and CATL, Beijing has made sure that local companies benefit at the expense of foreign companies like Samsung and Panasonic.

To protect their leadership position, the Chinese must find ways to improve the performance of their vehicles while continuing to lower prices. Beijing has been careful to secure access to the raw materials it needs, particularly rare earth metals such as cobalt and lithium. It has already made the rounds of the world's mines, starting with Argentina and Chile, which have major lithium deposits, and the Democratic Republic of the Congo, a key source of cobalt.

Aware of the problems associated with oil, China is planning ahead and expects to become the "Saudi Arabia" of electric mobility. By establishing itself at the head of the electric car and new-generation battery markets, Beijing has a tool in its hands that is more powerful than any conventional weapon.

President Trump, in the meantime, has his heart set on drilling ... for more oil.

*This article was originally written in French by Worldcrunch iQ expert contributor Laurent Horvath. It was translated by iQ language contributor Benjamin Witte.

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FOCUS: Russia-Ukraine War

Nuclear Card And Firing Squads: Lukashenko's Long Game To Retain Power

A few weeks after an explosion at a military field in Belarus, Vladimir Putin announced plans to deploy tactical nuclear weapons in Belarus. There is a connection, even if Belarus leader Alexander Lukashenko is walking a tight rope of domestic control and keeping Putin satisfied.

Image of Belarusian President Alexander Lukashenko welcoming Russian President Vladimir Putin in his arms.

Belarus' President Alexander Lukashenko welcoming his Russian counterpart Vladimir Putin at Minsk National Airport.

Igar Ilyash


Back on the afternoon of February 26, local Belarus media reported explosions at the military airfield in Machulishchy, near Minsk, and increased activity of military services. Soon after, the BYPOL association, created by former security forces to fight the regime of Alexander Lukashenko,, announced that Belarusian partisans had used drones to attack a Russian A-50U long-range radar detection aircraft.

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Neither Minsk nor Moscow acknowledged that such a valuable aircraft had been disabled. However, a few days later, the A-50U left the territory of Belarus for repairs.

The day after the explosions, Lukashenko convened a meeting of the security forces. He looked agitated, demanding "the strictest discipline" and spoke vaguely about some "internal events" and attempts to "stir up" the situation in Belarus. The Belarusian authorities publicly acknowledged the sabotage only on March 7.

That same day, Lukashenko accused the Ukrainian special services of organizing the terrorist attack in Machulishchy. "Well, the challenge has been met," he declared, before quickly clarifying that he did not intend to use the incident to draw Belarus into war. "If you think that throwing this challenge will drag us into a war that is already going on all over Europe, you are mistaken."

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