EV assembly line

This C1-level reading activity discusses the Chinese automotive industry’s impact on the global car industry. The post includes some comprehension questions, a vocabulary-building task and discussion questions. These questions are designed for class discussion but could easily be adapted to make a written homework assignment.

What is the potential impact of China’s automotive industry on global markets, particularly in the context of electric vehicles (EVs)? From 1997 to 2011, approximately one million American manufacturing jobs were lost due to competition from China. This period, known as the “China shock,” had far-reaching socio-political consequences, including its alleged influence on the rise of non-liberal trade policies and the election of Donald Trump.

Recently, Chinese carmakers have shown remarkable progress. For instance, in 2023, China exported over 5 million cars, surpassing Japan, the previous leading exporter. BYD, China’s largest car manufacturer, sold 500,000 EVs in the last quarter of the year, outperforming Tesla. Chinese EVs are notable for their affordability, style, and advanced features. There is a growing demand for these vehicles as the world shifts towards decarbonisation. By 2030, China could command one-third of the global car market, challenging Western automotive dominance, particularly in Europe.

This development raises concerns about a new wave of deindustrialisation in the West, attributed to Chinese competition. Politicians may blame China for job losses, exacerbated by a tense geopolitical climate and perceptions of unfair trade practices. China’s “Made in China” initiative since 2014 has involved significant subsidies to its car industry, including underpriced loans and purchase subsidies, which have raised questions about its adherence to global trading norms.

Western responses include potential protective measures. The European Commission is investigating Chinese cars, and the U.S. is considering increasing tariffs. However, excluding Chinese cars could be counterproductive due to the benefits of affordable, green vehicles. The automotive market is already evolving, with a significant shift towards EVs, which are less labour-intensive than traditional car manufacturing. This shift in manufacturing practices may be mistakenly attributed to Chinese competition.

Most economists argue that free trade in the automotive sector could have several benefits. Affordable Chinese cars could provide economic relief, especially in times of inflation. Chinese EVs are noted for their quality and advanced technology. Moreover, the existence of a domestic car industry is not a prerequisite for a country’s economic success, as exemplified by Denmark.

Environmental considerations are also crucial. Affordable Chinese EVs could facilitate the transition to net-zero emissions. For example, BYD’s cheapest EV in China costs significantly less than the cheapest Tesla in America, making green technology more accessible.

Concerns about the impact of Chinese competition on local industries may be overemphasised, as history shows that competition often leads to innovation and improvement. Additionally, Chinese carmakers are establishing production facilities closer to Western markets, which could balance trade dynamics.

Security concerns, such as dependency on Chinese batteries and potential surveillance risks, are acknowledged but deemed manageable. The article suggests that protectionist policies should be limited and that Chinese competition, driven by state subsidies, should be welcomed for its potential to stimulate global markets and accelerate the energy transition.

Comprehension Questions

  1. What is the “China shock” and how did it impact American manufacturing jobs between 1997 and 2011?
  2. How has the recent success of Chinese carmakers, especially in electric vehicles (EVs), challenged the automotive industry globally?
  3. In 2023, how did China’s car exports compare to Japan’s, and what significant milestone did BYD, a Chinese carmaker, achieve?
  4. Why is there concern in the West about a new wave of deindustrialisation due to China’s automotive industry growth?
  5. What are some of the protective measures being considered by Western governments in response to the rise of Chinese carmakers?
  6. What are the potential benefits of allowing free trade in the automotive sector, especially with regard to Chinese cars?
  7. How does the article suggest that concerns about Chinese competition affecting local industries might be exaggerated?
  8. What are the security concerns related to relying on Chinese EVs, and how does the article propose addressing these concerns?

Vocabulary Building (C1-level)

  1. Deindustrialisation: The reduction in industrial activity or capacity in a region or economy. It typically refers to the social and economic change process caused by the removal or reduction of industrial capacity.
  2. Milestone: A significant event or stage in the development, progress, or history of something.
  3. Automotive: Relating to or concerned with motor vehicles.
  4. Decarbonisation: The process of reducing carbon dioxide emissions and the carbon footprint of activities, particularly through the use of non-carbon-based energy sources.
  5. Geopolitical: Relating to politics, especially international relations, as influenced by geographical factors.
  6. Subsidies: Financial support from a government or other institution to support an economic sector, business, or individual.
  7. Protectionist: Relating to or advocating the policy of protecting domestic industries against foreign competition using tariffs, subsidies, import quotas, or other restrictions.
  8. Surveillance: The close observation, especially of a suspected spy or criminal. In the context of the article, it can also refer to monitoring people’s activities or communications through technology.

Instructions: Read each sentence and choose the appropriate word from the vocabulary list to complete the sentence. Write the correct word in the blank space provided.

Gap Fill Exercise (C1-level)

Fill in the blanks with the correct vocabulary word from the list provided. Use each word only once.

Vocabulary List:

  • Deindustrialisation
  • Milestone
  • Automotive
  • Decarbonisation
  • Geopolitical
  • Subsidies
  • Protectionist
  • Surveillance

Sentences:

  1. The shift towards electric vehicles in the __________ industry marks a significant change in how cars are produced and used.
  2. The government’s decision to support local farmers with financial aid is an example of __________.
  3. The __________ of the economy involves transitioning from coal and oil to renewable energy sources like wind and solar power.
  4. The fall of the steel industry in the region led to __________, resulting in significant job losses and economic decline.
  5. The signing of the peace treaty was a major __________ in the history of the two warring nations.
  6. Increased __________ at airports has been implemented to ensure the safety and security of passengers.
  7. The country’s __________ stance has resulted in high tariffs on imported goods to protect domestic manufacturers.
  8. The __________ tensions between the neighbouring countries have escalated due to border disputes and differing political ideologies.

Discussion Activities (C1-level)

  1. Debate on Protectionism vs. Free Trade: Divide the class into two groups. One group will argue in favour of protectionist policies, while the other advocates for free trade. Discuss the impacts of these policies on local economies, employment, and global relations.
  2. Role Play – International Trade Negotiation: Students assume the roles of diplomats from different countries negotiating a trade agreement. Focus on the automotive industry, addressing issues like tariffs, environmental standards, and labour laws.
  3. Geopolitical Implications Discussion: Explore how the rise of China’s automotive industry might influence global geopolitical dynamics. Discuss scenarios where economic interests could lead to political alliances or conflicts.
  4. Roundtable on Decarbonization Strategies: Discuss the different strategies countries can adopt for decarbonisation, considering technological advancements, economic feasibility, and societal impacts.