China has sharply ramped up its production of cheap electric vehicles, solar panels, and batteries just as the Biden administration has pushed through legislation supporting many of those same industries in the United States.
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Chinese automaker BYD had recently introduced an electric SUV at the "astonishingly low" price of $14,000. China's auto industry poses an "existential threat" to U.S. carmakers, the report argued.
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After more than a decade of subsidizing its automakers, China has built a substantial car industry that accounts for 60% of global electric vehicle sales, according to the Paris-based International Energy Agency.
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Yellen highlighted the Biden administration's concerns by recalling a visit a week earlier to Suniva, a solar cell manufacturer in Norcross, Georgia.
The company "was once forced to close down, like other companies across a number of industries, because it could not compete against large quantities of goods that China was exporting at artificially depressed prices," Yellen said.
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China hasn't committed to any steps to address American concerns, arguing that its cheap solar panels and other green products are helping the world wage the costly battle against climate change.
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This reminds me of the shift in the car market when Japanese cars entered the market after the Oil Crisis. American auto makers, used to building unreliable land yachts, couldn't adapt fast enough. Now we have American car makers building electric land yachts that people can't afford, and are threatened by cheaper foreign cars.
But unlike Japan, they can't force China into Plaza Accord and are panicking.