Biden’s Green Subsidies Fueling Chinese Economy

Posted on Saturday, May 4, 2024
by Ben Solis

AMAC Newsline Exclusive

joe biden and xi jinping, chinese president

Nearly two years since passage of President Joe Biden’s misnamed “Inflation Reduction Act” (IRA), Americans have seen little in the way of inflation reduction from the bill, while Chinese entities have lapped up the legislation’s lucrative subsidies for so-called “green energy.”

According to an informational bulletin from the Chinese Communist Party which I reviewed, CCP leaders were overjoyed upon passage of the IRA two years ago, calling it a “mountain of gold.” They believed that the taxpayer-funded subsidies in the bill would be a major boon for Chinese companies, which control an outsized share of the green energy market.

In total, according to Goldman Sachs, the actual cost of IRA subsidies is expected to be around $1.2 trillion between 2022 and 2031 – more than three times what the bill’s supporters initially claimed. That’s an enormous pool of money which provides ample motivation for Chinese firms to go to extreme lengths to take advantage of it.

One of the biggest areas of concern is solar panel production. China currently produces nearly 80 percent of the world’s solar panels, while the United States produced just under 2 percent in 2023.

According to a report from the Wall Street Journal earlier this year, “China’s solar giants are building their factories inside the U.S.” to take advantage of subsidies in the IRA.

“China-based companies are behind nearly a quarter of the roughly 80 gigawatts in new solar-panel capacity that has been announced since that legislation,” the Journal reports. “That positions them to be big beneficiaries of government subsidies as well—as much as $1.4 billion a year collectively if the panel factories announced so far are built, according to Journal calculations.”

Jeff Ferry, the Chief Economist for the Coalition for a Prosperous America, has further estimated that CCP-linked entities could siphon away up to $125 billion in taxpayer-funded subsidies thanks the IRA and other laws enacted by the Biden administration.

The severity of the situation was underscored by a recent urgent appeal from the American Alliance for Solar Manufacturing Trade Committee to President Biden. They have called for more strict protective tariffs on solar panels and solar panel materials from Asia, with Tim Brightbill, the group’s attorney, emphasizing that the U.S. solar manufacturing industry is “undoubtedly” in a “very precarious position.”

Chinese dominance of battery production for electric vehicles is another major opportunity for Chinese firms to take advantage of U.S. subsidies. China currently controls almost two-thirds of the world’s lithium processing capacity, 75 percent of its cobalt capacity, and 99 percent of its graphite capacity, all necessary materials for EV batteries.

While the Inflation Reduction Act is supposed to exclude any “Foreign Entity of Concern,” including companies with close links to Beijing, in practice this has not been the case. By forging one-sided partnerships with American companies, CCP-linked firms such as CATL and BYD have been able to find loopholes in the law to vacuum up the subsidies and tax credits.

A major Chinese wind turbine maker is also considering establishing American production and research plants. Ten Chinese wind equipment producers already have offices in the U.S.

China’s aggressive moves to use the IRA’s subsidies as leverage to gain an advantage in its economic competition with the United States are another obvious sign that the CCP is weaponizing Biden’s ideological obsession with bringing about a “green revolution” against the American people.

Economics Professor Gianluca Anselmetti, a former advisor on Asian affairs for the Italian Christian Democracy party, told me that China’s efforts to take advantage of U.S. green energy subsidies are part of an “escalation of the CCP’s economic war against the West, with a particular focus on America.”

“The United States is not China’s friend but rather its target, and this is a reality that must be constantly kept in mind,” Anselmetti continued. “They are leveraging U.S. subsidies and other opportunities to dismantle America’s manufacturing base, to weaken you.”

“The U.S. president looks as if he cannot see this sufficiently clearly,” he added.

The United States may thus be facing a completely self-inflicted economic crisis as it hands a major opportunity to its greatest geopolitical rival.

On top of it all, the supposed justification for these giveaways— an allegedly looming “climate catastrophe” – is motivated by left-wing dogma rather than scientific fact. As the late Dr. Tim Ball often said, the idea that human-caused climate change poses an imminent and existential threat to humanity is “the biggest deception in history.”

This lie, Dr. Ball predicted in a 2010 interview with me, is not just a matter of scientific debate. It has significant financial implications. “This lie is going to make a lot of people a lot of money,” he said, pointing toward the potential exploitation of climate change alarmism for financial gain.

That prediction is now being proven accurate today – and the American people will likely suffer as a result.

Ben Solis is the pen name of an international affairs journalist, historian, and researcher.