Abstract

Purpose - The purpose of this study is to derive improvement measures for China's renewable energy vehicle subsidy policy under the WTO system. The parts of the new and renewable energy vehicle subsidy system enacted by China that are inconsistent with the WTO subsidy agreement are identified, and policy improvement measures are suggested. Design/Methodology/Approach - This study conducted existing literature studies and case analysis to derive improvement measures for China's renewable energy vehicle subsidy policy under the WTO system. First, the existing literature research analyzed previous studies on the renewable energy vehicle subsidy policy. Second, the case analysis identified the inconsistency of China's renewable energy vehicle subsidy policy with the WTO subsidy agreement based on the results determined in WTO-related dispute cases. Findings - Since it is stipulated that only renewable energy vehicle producers are eligible for subsidies under China's renewable energy vehicle subsidy policy, renewable energy vehicle subsidies establish the specificity specified in the WTO subsidy agreement. Local governments established factories locally and provided subsidies only to renewable energy companies using on-site facilities, which is a prohibited subsidy under the WTO subsidy agreement. Research Implications - First, prohibited subsidies must be removed by expanding the subject of subsidies or changing the payment method. Second, the central government should strengthen the supervisory capabilities of local governments. Third, it is necessary to encourage and expand the introduction of personal capital in the field of renewable energy infrastructure. Fourth, various support measures in addition to the subsidy policy should be added to reduce the suspicion of prohibited subsidies in other countries and promote industrial development.

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