Cold War through subsidies harms all

During a regular meeting of the World Trade Organization's Committee on Subsidies and Countervailing Measures held in Geneva, Switzerland, on Tuesday, Chinese representatives pointed out that the United States' Inflation Reduction Act of 2022 uses green policies as a guise to implement protectionist measures, while urging the WTO subsidy watchdog to strengthen its supervision on that.

That's the right place and the right time to shed light on the controversial act that has made almost all major economies uneasy, as the amounts of subsidy the Joe Biden government will be authorized to offer companies in the green industry will reach such a level that it will bend the playground toward the US.

The WTO's silence, so far, has not only emboldened the US to advance the agenda but also given a misleading signal to other developed economies, the European Union for instance, that can afford comparable levels of subsidies to prevent their companies from being lured to shift base to the US.

That means the threshold for global green sectors will be markedly raised by the US and the EU's unfair subsidies, forcing the developed countries and emerging market economies, which are key players in advancing the world's green development, into a corner as they don't have enough money to take part in the subsidy competition, resulting in not only capital outflows but also brain drains from their just fledging green industry and economy.

The US CHIPS and Science Act of 2022, too, reflects the Biden administration's double-standard approach to industrial subsidies. The US' chip subsidies are closely coordinated with its export controls, seriously disrupting the global semiconductor supply chain. This act prohibits companies from expanding their advanced semiconductor manufacturing in China for 10 years after they receive a subsidy to build a US plant.

The two acts reflect the US' Cold War mentality and bullying in the field of trade. They have not only seriously harmed China's interests but also affected the immediate interests of all parties, including the US and its allies.