A subsidy-fueled boom helped build China into an electric-car giant but left weed-infested lots across the nation brimming with unwanted battery-powered vehicles.
Capitalism dictates maximizing profit by any means, including taking free money from the government.
A government giving out targeted free money, is not an “unrestricted capitalism” government.
China, is an aggressively capitalist society, colliding with a strongly communist facade. Or a disaster in slow motion.
China is an instance of State Capitalism, where the government owns the means of production, and uses it for profit-generation. The only reason that anyone in the West actually believes it’s at all Communist is because we’re so indoctrinated by Red Scare propaganda that most people can’t tell the difference between “workers own” and “the government owns”, since the only kind of private ownership we recognize is ownership by oligarchs/corporations.
Subsidies are by definition not a restriction on bad behavior but an incentive. There is no reason a company can’t ignore a subsidy if it doesn’t want to.
Subsidies skew the market toward specific sectors, technologies, or actors. A company that do not benefit from subsidies is at a competitive disadvantage vs a company that do get subsidies.
A totally free market wouldn’t have any subsidies. But markets aren’t totally free in practice.
Subsidies are typically a good thing when it benefits cleaner tech or improving energy efficiency. It’s the fossil fuel subsidies that do the most harm.
I would argue that being horriblely disadvantaged by not getting free money is not in fact a restriction on the market.
