This is a really fascinating paper that everyone interested in China's industrial policy should read. It destroys so many myths (see below), and is written by deeply credible people who conducted over three years of fieldwork in China and interviewed 60 Chinese officials, entrepreneurs, and engineers. When it comes to China studies, it literally doesn't get more rigorous than this. First myth it destroys: contrary to popular belief, Beijing's industrial policy didn't build the companies that became China's EV champions. They rose largely **despite** it, through its cracks. For sure, Beijing did favor EVs as an industry and pushed hard for it but their big bet was SOEs (State Owned Enterprises): research grants, pilot programs, licenses, cheap credit - virtually all of it flowed to state firms. The result? China's actual EV champions - BYD, Geely, NIO, XPeng, Li Auto, etc. - are overwhelmingly private firms that succeeded despite Beijing favoring their SOE competitors. How so? Because, when favoring SOEs, the central government didn't just pick winning companies, it picked winning cities, each SOE being anchored in a specific city: Shanghai (SAIC), Changchun (FAW), Wuhan-Shiyan (Dongfeng), etc. Which means that every city not on the list, that wanted a piece of the auto boom, had only one option left: team up with private entrepreneurs who were equally excluded from central government favor. That's what truly fueled China's EV miracle: an alliance of the excluded, between local private entrepreneurs and local mayors. This is the biggest misconception this paper destroys: the reality is that the "Chinese state capitalism" that many in the West think powered the EV boom actually tried to block many of these companies from existing. In effect, it was closer to an obstacle course that local actors (mayors and provinces) learned to game. Geely - now the third largest automaker in China - is a fantastic example of this. First of all, it started off illegal since, to build passenger cars, you had to have a central government license and they couldn't get one. Zhejiang Province told them to go ahead regardless because the province had hundreds of auto parts suppliers but no carmaker of its own. It's only a couple of years later, recognizing the fait-accompli that Geely was producing cars and was competitive, that the central government admitted them to the National Sedan Catalog - effectively legalizing them retroactively because there were facts on the ground. Then there was the Volvo acquisition in 2010, which is fair to say - looking back - proved to be the most strategically valuable acquisition in Chinese automotive history. Despite it being presented at the time (and still described this way today) as "China buying Volvo", all 3 major state-backed banks in China (Export-Import Bank, China Development Bank, Bank of China) refused to finance the deal. The only state-bank money Geely managed to get was a $200 million loan from a provincial branch of China Construction Bank - a tiny fraction of what the deal required. Geely actually did the deal with Goldman Sachs money via Hong Kong plus loans and equity from four local governments (Chengdu, Zhangjiakou, Daqing, Shanghai's Jiading district), each of which bought in by securing a Volvo plant or headquarters for itself. In effect, the doors that Beijing controlled were largely closed to Geely, but it made it because the doors subnational actors controlled were opened. Which all means this paper destroys another very common myth: the big merit of the central government in all this was to be relatively chill about it, to NOT be dictatorial. I just imagine if that had happened in France and you had - say - the mayor of Lyon or Marseilles open, fund and promote an unlicensed carmaker against Renault: the préfet would shut it down within weeks, and the mayor would be lucky to escape prosecution. That's the irony: on industrial policy, the supposedly "totalitarian" Chinese state proved more tolerant of local defiance than most Western liberal democracies would be. Beijing's greatest contribution to the EV miracle wasn't the plan - it was looking the other way while the plan was being violated. To be sure, the paper doesn't hide the costs of this system: ferocious local competition also produced what's known today in China as "involution" (内卷-Neijuan, basically a hypercompetitive price war), as well as some spectacular failures. For instance one county lost 6.6 billion yuan on a carmaker that never really made cars. But that's precisely the point: this is a high-risk, high-reward model of decentralized experimentation, the very opposite of the careful central planning Westerners imagine. I've repeated this countless times but it bears repeating again: the single greatest misconception people have about China is - probably because we wrongly associate communism with centralized control - that it is a monolith run from Beijing. Some even say it's run by "one man." The reality is the exact opposite: China is, in practice, one of the most decentralized countries on earth. Roughly 85% of government spending in China happens at the subnational level - against about 30% in the average OECD country (and even less in France, which is actually one of the most centrally controlled countries on earth). A Chinese mayor commands fiscal resources, land, investment funds and policy latitude that virtually no Western mayor could dream of. Last but not least, I'd be remiss not to mention what the paper has to say on the positive legacy of Mao and its role in the rise of EVs (given I myself wrote an article titled "Mao's economic record wasn't bad, actually": arnaudbertrand.substack.com/…). When it comes to China myths, none is more entrenched than the idea that Mao left behind nothing but ruins. This paper confirms a key argument of my article: Mao's deliberate dispersal of industry across China (during the Great Leap Forward and Cultural Revolution decentralizations) left dozens of cities with their own small auto works. Inefficient, yes - but these scattered factories survived into the 1990s and became the seed stock of everything that followed: the industrial base, the engineers, and the production licenses that EV startups would use to enter the market. The paper even says it outright: the fragmentation that industrial policy "sought to eradicate" is "precisely" what "ironically enabled" the EV sector's rapid rise. This is exactly the mechanism I described in my Mao article: structures built in the Mao era - communes becoming township governments, commune enterprises becoming TVEs, Third Front factories seeding interior industrialization - became load-bearing foundations of the reform miracle. Fittingly, the spark for China's first municipal carmaker adventure was literally a TVE (Township and Village Enterprise), the institutional descendants of Mao's commune enterprises: Tongbao, a kit-car maker in Wuhu whose success stunned local officials into building what became Chery (one of China's biggest carmakers today). You can't tell the story of China's EV miracle without crediting the legacy of Mao. What's the biggest lesson in all this for Western policymakers? The obvious one is that the part of industrial policy that most people assume China does and that they sometimes want to copy - i.e. the state picking winners - is actually the part that failed. The part that did succeed is the China nobody in the West believes exists: a radically decentralized system with a high degree of tolerance for disobedience and experimentation. We imagine China as a country where nothing happens without Beijing's approval when the reality is closer to the opposite: China's EV miracle happened precisely because localities asked for forgiveness rather than permission. All in all, and this is the lesson I often come back to, this is yet another illustration of the importance of understanding China for what it is as opposed to the caricature we've built of it. This matters whichever "camp" you're in. If you see China as a rival, you can't compete with someone you don't understand. If you see them as a source of lessons, you can't emulate what you've misunderstood. Whatever you want from China - to compete with it or learn from it - the entry fee is the same: genuinely understanding it.

The phrase ´third world´ has a genuine seventies ring to it: poor countries, left behind. Since however: South-Korea. Singapore. China. India. Uruguay. Chile. Indonesia. Vietnam. Brazil.

What will go wrong...

Naked racism

🧵"Desidero che la Papamobile venga trasformata in una clinica mobile e donata ai bambini di Gaza" Questa è una delle ultime volontà di Papa Francesco prima di morire. Ad eseguire la disposizione di Papa Francesco, il Vaticano incarica il cardinale svedese Anders Arborelius che a sua volta incarica la Caritas svedese per la trasformazione del veicolo. Quando la stampa dà la notizia dell'incarico alla Caritas svedese di trasformare la Papamobile in clinica mobile per i bambini di Gaza, scatta la solidarietà dei cittadini svedesi che in pochi giorni inviano alla Caritas cospicue donazioni. Grazie alle somme raccolte, la Caritas, non solo riesce a trasformare la Papamobile in una clinica mobile fornita di attrezzature mediche di ultima generazione, ma acquista altre 12 ambulanze da inviare a Gaza. A novembre dello scorso anno, quando i lavori sulla Papamobile sono ultimati, per celebrare l'evento e assolvere all'ultima volontà di Papa Francesco, il Vaticano sceglie Betlemme, la città simbolo per eccellenza della cristianità, la città dove nacque Cristo. In Piazza della Mangiatoia, il cardinale Anders Arborelius benedice la Papamobile e le ambulanze in partenza verso Gaza. La Papamobile viene rinominata "Veicolo della Speranza". Passano giorni, settimane e poi mesi ma gli occupanti israeliani non consentono alla Caritas di fare entrare il Veicolo della Speranza a Gaza. I rappresentanti del Vaticano e della Caritas chiedono più volte spiegazioni ma Israele si prende gioco di loro inventando storie assurde. "Non è pervenuta alcuna richiesta di autorizzazione" E poi ancora: "I materiali sanitari all'interno della Papamobile potrebbero finire nelle mani di Hamas ed essere usati come armi". E intanto la Papamobile, trasformata in un gioiello della tecnologia medica, in grado di curare 200 bambini al giorno, è ancora lì, dopo sette mesi, sotto una teca in un parcheggio a pochi metri da Piazza della Mangiatoia in attesa di raggiungere i bambini di Gaza. In uno stupendo articolo scritto dal cardinale Arborelius su ICN, Independent Catholic News (*link nel primo commento) il cardinale si rivolge alle autorità israeliane, chiede, quasi supplica, di lasciare entrare il Veicolo della Speranza ma non rinuncia a scrivere: "Negare le cure mediche ai bambini significa oltrepassare un limite morale che dovrebbe turbare tutti". Limite morale che non turba i leader politici occidentali che ostentano senza ritegno la loro fede cristiana ma restano in un vile silenzio mentre la colonia di plastica denominata Israele umilia il Vaticano prendendosi gioco delle ultime volontà di un Papa. Che schifo!

Employment in the EU green economy has grown by an average of 6% per year since 2014, reaching 5.8 million full-time equivalents in 2023. 🌿📈 🔹Green employment in construction grew the most between 2014 and 2023, an average 11% annual growth. 👉 link.europa.eu/pvKRw3

Between 2014 and 2023, EU employment in energy from renewables grew the most, from 0.4 million full-time equivalents to 0.8 million ( 79%).🌿📈 Read more 👉link.europa.eu/pvKRw3 #EUGreenWeek2026

Let's be clear: Smotrich, Ben-Gvir and Netanyahu are evil, racist, genocidal maniaks. Resist.

Russia is an imperialist, corrupt, authoritarian state in demographic decline. That´s not the responsibility of the EU. But when it sends 1.400 young men *a day* to their death/severe injuries to foster nightmares of national grandeur and continuously threatens you...

My latest: sources on the regulations of the Commons of Ameland landbouwgeschiedenis.nl/wp-c…

Yup. Trillions.

The European war...

Russland hat heute Nacht zwei NATO-Staaten angegriffen. Ein türkisches Frachtschiff und ein rumänischer Wohnblock erlitten schwere Schäden.

In the European war, there is a 20 km expaņding death zone were dozens of drones per human hunt people down. Sci Fi stuff. But real. #whathappensinUkrainewontstayinUkraine

The United States and the Netherlands share one of the world’s strongest and most enduring partnerships, built on 250 years of shared values, innovation, and cooperation. We were disappointed by the Dutch government’s decision regarding the Kyndryl-Solvinity deal. Read the full statement: nl.usembassy.gov/statement-d…

Oops. The facts that central banks only have a limited influence on inflation while low inflation does not guarantee monetary stability (another mandate) still have to sink in. Aside of this an orderly payment system and guarding the banking system are important too.

My main quote in English: "Grid operators could do much more to stimulate V2G. That would mitigate a lot of grid reinforcement, esp. in residential areas." "I think it's unacceptable that grid operators aren't actively pleading with electric drivers to solve grid congestion."

Glad Dutch media give a lot of attention to the V2G demo of KIA and Hyundai. Using the batteries of cars to SUPPLY energy to the grid during peaks could be a major solution for the "world leading grid congestion" in the Netherlands. nos.nl/artikel/2616113-elekt…