mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
Green Money
Green Graft Grows in China

Beijing just accused more than twenty auto manufacturers of cheating a system of subsidies meant to incentivize the production of eco-friendly cars. Reuters reports:

On Thursday, China’s Ministry of Finance punished at least five car makers, accusing them of cheating its program to subsidize electric and plug-in hybrid vehicles, receiving roughly 1 billion yuan ($150 million) in illegal subsidies.

“This is a major blow to the industry and also has a large impact on the country’s policy enforcement,” Xu Yanhua, a vice secretary for the China Association of Automobile Manufacturers told a news briefing.

The ministry said it would revoke the production license of Suzhou Gemsea Coach Manufacturing, while the other four firms would be fined. The companies named included a subsidiary of Chery Holding, owner of the seventh most popular Chinese passenger car brand.

This program funnels $4.5 billion to carmakers interested in producing cleaner-emitting and higher-mileage vehicles every year, but China is alleging that some bad actors (including Nissan and Hyundai) are reaping the benefits without producing the results. And on the results side, things do look meager, as through August just 245,000 plug-in hybrids were sold in China, a far cry from the sales target of 700,000 that Beijing set for 2016.

China has an obvious desire to “clean up” its nation’s cars, what with the toxic, deadly, and expensive air pollution that continues to cloud its many megacities. But Beijing is experiencing something that we’ve seen time and again with similar green incentive programs: corruption.

Between lavish government subsidies and a burgeoning market of “eco-aware” consumers, there is a lot of money to be made these days by marketing one’s products as green. But this new niche is a bit like the Wild West, with the producers making up the rules as they go along (just what does organic mean, anyway?). And when they’re not bending the truth with fuzzy marketing, firms are looking to take advantage of lax oversight, hoping to slap the label “clean” on their product without actually doing any of the work to back that claim up. The Volkswagen scandal was the most egregious example of this, but we’re seeing a similar event occurring in China right now.

The bottom line is this: companies care more about their bottom line than they do about saving the planet, regardless of whatever their commercials or billboards might say. A large number of China’s carmakers just got caught with their hand in the cookie jar, but they’re not the first to try and cheat the green system, and they won’t be the last.

Features Icon
Features
show comments
  • Rick Johnson

    In chemistry, organic means carbon based, which means anything that is or was once living.
    That means, all food, with the exception of salt and water, is organic, regardless of how it is grown.
    It also means that all fossil fuels are organic.
    Therefore, anyone who drives to a supermarket to do their weekly grocery shop is living an ‘organic’ lifestyle.

    • Andrew Allison

      “organic means carbon based, which means anything that is or was once living” can’t be said too often.

  • Jim__L

    So Greenies and Leftists make laws about “eco-friendly” products, and the people that produce those products… ignore them.

    This sounds like a healthy response to me.

    • Andrew Allison

      Well no, the subject is people who lie, cheat and steal in order to appear to be in compliance with these laws.

      • Jim__L

        At a certain point, the only thing a rational, sane, or good person can do is ignore irrational, insane, and unjust laws.

        • LarryD

          At a certain point, it becomes time to “… spit on his hands, hoist the black flag, and begin to slit throats.”
          H. L. Mencken http://www.quotationspage.com/quote/34585.html
          Time for a peasant revolt, not against the royalists (we have none), but against the Jacobins (who have become want-ta-be aristocrats).

  • Jacksonian_Libertarian

    Everything the Government Monopoly meddles with, including environmental subsidies, turns to corruption, and it can’t be any other way. Monopolies all lack the all important “Feedback of Competition”. It’s the “Feedback of Competition” that provides both the Information and Motivation which forces continuous improvements in Quality, Service, and Price in free markets. Further, free markets or Capitalism if you will, can’t efficiently operate where the “Rule of Law” which holds political leadership as accountable to the law as the average Joe isn’t strictly enforced. This means that Xi and all his cronys, are robbing the economy to line their pockets, and that might makes right culture permeates China. This is also happening in America with Obama and the Clinton’s and their cronys no longer being held accountable to the law.

    • Andrew Allison

      Although I agree with your philosophy, it’s human nature that’s the problem here. If you dangle money in front of people, some of them will figure out a way to steal it.

  • Andrew Allison

    I’m shocked, SHOCKED to learn that offering people money to pass a test results in corruption! I might add that student loans fall into this category.

© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service