Qiaofu, Creator, Automobiles, and the Jianghu Together Witness the Rise of China's Automotive Industry

On July 5th, SAIC officially announced a counterattack against the EU's targeted and discriminatory tariff policy. Although the counterattack's strength and form are limited, we still commend SAIC for its actions.

In the competition for overseas markets, SAIC has fully demonstrated the responsibility and foundation of a state-owned enterprise.

This is why I tend to favor the development of state-owned national brands over private national brands.

Case Review

In June, the EU launched a subsidy investigation against Chinese automakers, with the preliminary results as follows:

BYD imposed 17.4%,

Geely is 20%,

SAIC 38.1%,

Tesla will be discussed separately;

The remaining 21% not mentioned.

It is worth noting that SAIC received the highest tariff rate of 38.1%, citing non-cooperation with the investigation.

In July, the EU announced the preliminary ruling of the investigation, slightly reducing the tariff imposed on SAIC to 37.6%. Such a minor adjustment is almost insulting, intended to show that the EU has carefully considered and heard the company's appeals.

Regarding this result, SAIC officially announced a counterattack, although the effectiveness of the counterattack remains to be seen. However, SAIC's counterattack further validates the real reason for its discriminatory treatment.

Namely, the EU used the pretext of an investigation to steal core technologies. After failing to achieve its theft goals, it resorted to abusing tariff measures against SAIC out of frustration.

What we need to understand is that counter-subsidies are merely a pretext. The real reason is that the EU wants to hinder the development of Chinese electric vehicles. If we talk about subsidies, SAIC should not be the highest among these three companies.

Two peaches kill three warriors

The EU has targeted SAIC with high tariffs, while BYD and Geely face relatively lower tariffs. This arrangement is reminiscent of a strategy used by our ancestors, known as "two peaches kill three warriors." It is rumored that China's high-speed rail initially gained technology through this strategy.

So, what are the peaches? The peaches are the EU market.

Naturally, the three warriors refer to SAIC, BYD, and Geely, or more broadly, Chinese automakers.

Why SAIC, BYD, and Geely.

Currently, in the EU's electric vehicle market, SAIC occupies a significant share. The EU believes that SAIC cannot afford to abandon the EU market, especially as the domestic market faces challenges. The EU market has become increasingly important for SAIC.

Geely also has a considerable presence in the European market.

BYD, as a new force entering the EU market, is full of energy and ambition, possessing the strength to challenge SAIC.

These three companies each have their unique situations and goals, making them the ideal candidates for the EU's strategy of using the market to exchange for technology.

The Way to Break the Situation

The essence of "two peaches kill three warriors" is to utilize information asymmetry to trigger conflicts in benefit distribution and achieve one's goals. Therefore, to break the situation, there must be a highly coordinated organization that ensures smooth communication among the three warriors and also guarantees a reasonable distribution of their interests.

A key issue here is coordinating collective interests and individual interests. Collective interests refer to national and industry interests, while individual interests refer to the interests of enterprises and their owners.

I believe that it is understandable for enterprises to pursue individual interests. However, at the same time, I think the public also has the freedom to prioritize the development of common interests.

If we refer to Chinese enterprises venturing overseas as national brands and public enterprises represented by SAIC as state-owned national brands, we should prioritize the development of state-owned national brands before national brands. This is because state-owned national brands are more reassuring and responsible.