Trend Defensive industrial policy against China's green-industry dominance feeds protectionism

Summary

China has become the global front-runner in batteries, electric vehicles, solar power and ultra-fast charging, and its rise in green-transition industries is causing unease abroad. Fierce domestic competition, known as involution, has also produced overcapacity that the report treats as a serious structural economic problem. As governments increasingly see climate security as economic security, climate policy itself is taking on a protective, domestic-industry character. Defensive industrial policies aimed at reducing dependence on China, such as tighter EU rules of origin, a 45.3 percent tariff on Chinese electric vehicles and visa limits on Chinese technicians, are spreading. The report sees these measures feeding a broader wave of global protectionism.