Illustration: Xia Qing/GT

Recently, some European political figures have accused China of "market distortion" and "flooding global markets with subsidized overcapacity," calling on China to "take more responsibility" for the problems related to the so-called state-led growth model. 

These narratives may seek to project an image of defending open markets, while what they actually reveal is a strategic attempt to contain China's rise by framing legitimate development tools as threats to the global economic order, exposing the hypocrisy of the West.

Subsidies and industrial policies are neither new nor unique to China. In fact, the world is witnessing a global resurgence of industrial policies. 

According to the World Bank, the use of industrial policy measures increased ninefold between 2017 and 2023, with advanced economies taking the lead. High-income countries introduced nearly two-thirds of all new industrial policies in 2023 alone. Meanwhile, the IMF reports that EU industrial policy spending tripled from 0.5 percent of GDP in 2012 to approximately 1.5 percent in 2022. 

Clearly, state intervention in economic development is no taboo in the West; it has become mainstream. And here's the hypocrisy: Many of these measures by the developed world are explicitly designed to "distort market competition," the very thing they accuse China of doing. 

For example, the EU Hydrogen Bank's 1.2-billion-euro ($1.34 billion) grant auction for renewable hydrogen mandates that projects source no more than 25 percent of plant components from China. 

Another example is the European Commission's Clean Industrial Deal State Aid Framework, adopted on June 25, 2025. It provides EU-based energy-intensive industries with electricity price rebates of up to 50 percent for three years - justified by the need to offset cost disadvantages resulting from "less ambitious climate policies" from other countries (specifically China). 

Measures like these may be wrapped in the language of "resilience" or "green transition," but their intent is unmistakable: to shield domestic firms from global competition.

In contrast, China's industrial policies strictly adhere to World Trade Organization (WTO) rules and the commitments it made upon accession. China is committed to transforming differentiated and selective industrial policies into inclusive and functional ones. Chinese subsidies are focused on R&D and consumption rather than exports - meaning they do not fall under the WTO's definition of "prohibited subsidies." Furthermore, China has demonstrated transparency by regularly submitting subsidy notifications to the WTO. 

Attempts to label China's global competitiveness as state handouts ignore a deeper reality: The country's manufacturing strength is built not on subsidies, but on comprehensive and efficient industrial chains, intense domestic competition, and relentless innovation. 

Ultimately, the West's selective outrage over subsidies points to a deeper discomfort - not with trade practices, but with China's model of development. This discomfort is not primarily economic, but ideological: a rejection of alternative pathways to modernization.

The international community should work to update global trade rules to reflect today's economic realities. If industrial policy is to be a legitimate tool of national development, global rules must be applied consistently; they cannot be deemed acceptable only when used by the West. That starts with a few clear principles.

First, disagreements over subsidies and industrial policies must be addressed through dialogue anchored in WTO rules, not through unilateral measures.

Second, industrial policies should be transparent, non-discriminatory and designed to avoid a destructive race to the bottom.

Third, all countries, especially developing ones, must retain the right to pursue industrial policies tailored to their specific needs. The discussion of industrial policy should not become an excuse to dictate other countries' development models or economic systems.

Fourth, all parties should uphold a firm commitment to international economic and trade rules and to the multilateral trading system, not bent to suit the interests of the few. Deals struck at the expense of third parties may offer short-term political gains, but they will ultimately undermine global economic stability. 

In today's fragile global economy, turning inward through unilateralism and protectionism will only deepen divisions and fuel instability. Only by upholding free trade and true multilateralism can countries navigate uncertainty, rebuild trust and foster sustainable growth. 

These double standards are not only undermining the credibility of those who decry them, but are also fracturing the very multilateral system they purport to protect.

The author is an international affairs observer. opinion@globaltimes.com.cn