China's Tech Export Push: EVs, Open Models and the US Backlash

China's technology policy is no longer about catching up. It is about exporting the result: cheap electric cars, free AI models, batteries and chips that other countries now have to decide whether to buy, block or build themselves.

The most visible example arrived in June at the Port of Melbourne. A purpose-built LNG-powered bulk carrier, the BYD Zhengzhou, docked on its first voyage to Australia carrying 5,000 newly built electric vehicles, RNZ reported, citing ABC News chief business correspondent Ian Verrender. It was the largest single EV shipment ever sent to Australia. The shipment matters because Australia has no domestic car industry and few trade barriers, which makes it a useful gauge of consumer taste. In the first half of this year, sales for every major Japanese automaker bar Honda sank in Australia, RNZ reported: Mazda fell 17 percent, Toyota 21 percent, Subaru and Mitsubishi 25 percent each, and Nissan 32 percent. BYD sales jumped 124 percent, Chery 77 percent and Geely 495 percent. All three grew from a much smaller base, though, which exaggerates the percentage gains.

Almost a quarter of all cars sold in Australia last month were fully electric, up from just 7 percent a year earlier, according to the same RNZ account. Add hybrids, and EVs are now neck and neck with petrol and diesel cars.

The driver is price and technology, not just climate policy. Riz Akhtar, founder of the research group carloop, told RNZ he was driving a Chinese EV that cost around A$40,000 and that an equivalent Japanese or European vehicle would be more than 25 percent more expensive. "Consumers aren't stupid. They're not going to spend money they don't need to," Akhtar said. Toyota vice-chairman Koji Sato was blunter at an annual supplier meeting in March: "Unless things change, we will not survive," he said, according to RNZ. In Europe, Volkswagen chief Oliver Blume has foreshadowed lay-offs of up to 100,000 workers, and VW's share price has halved since his predecessor was removed four years ago, RNZ reported.

Beijing's leverage is not only in finished cars. China dominates the refining and production of industrial metals and minerals needed for batteries, including lithium, cobalt, manganese and graphite, and churns out almost all the world's anode and cathode production, RNZ reported. It now accounts for 90 percent of global battery production. That dominance is now a live problem for the United States. In late August, the Trump administration declared a national emergency that effectively bans Chinese batteries from grid-scale energy storage systems, MIT Technology Review reported. The order bans installation of "any foreign-produced bulk-power system electric equipment" that poses a national security risk, and specifically names battery energy storage systems, inverters and transformers. Import taxes on batteries rose to 25 percent in January, up from 7.5 percent. From 2026, 55 percent of the cost of materials in new storage projects must come from outside China and other restricted countries for projects to qualify for tax credits.

"An outright ban was a bit of a surprise, and it does create a bit of concern for domestic players in the US," Shan Tomouk, energy storage lead at Benchmark Mineral Intelligence, told MIT Technology Review.

BloombergNEF expects the ban to slow grid-connected storage projects in the near term as developers wait for Department of Energy guidance due by the end of the year. Isshu Kikuma, an energy storage analyst there, told MIT Technology Review that some projects may need to find alternative cell suppliers, likely at higher cost than Chinese imports. "Worst case, those projects could get canceled," he said. US factories from LG Energy Solutions, Samsung SDI, Ford and SK On are set to come online or ramp up by next year, and a slowing EV market is pushing some plants designed for vehicle batteries to retool for grid storage. MIT Technology Review reported the US could have enough battery capacity by about 2030, though domestic supply may not fully meet demand until later in the 2030s.

Software is following the same pattern. Chinese AI models such as Moonshot's Kimi, Alibaba's Qwen, DeepSeek and GLM are generally open-weight, meaning the model software and final parameters are released but not the training data and methodology, according to The Conversation. That distinction matters for companies weighing a free download against a paid API from OpenAI or Anthropic. The arrival of Kimi last month divided President Donald Trump's AI advisers. David Sacks, Trump's AI and crypto czar until March, called Anthropic's models "lobotomized" and "woke" over the weekend, while Pentagon official Emil Michael called OpenAI's new head of strategic futures a "supreme village idiot," MIT Technology Review reported. Sacks, no longer in a formal role, argued that Chinese models are popular because they carry fewer restrictions on use, putting aside built-in state censorship.

The White House has moved toward more intervention, with a review process to vet AI models' security before release. Dean Ball, a former Trump AI adviser now at OpenAI, called it a "de facto licensing regime for frontier AI," and predicted the administration might use soft power to make US companies afraid of using models like Kimi. Michael rejected that, saying the government would go through "the democratic process not some Deep State scheme."

The split extends to industry. The Guardian reported that Microsoft, Nvidia, Palantir and Meta signed a letter urging lawmakers not to restrict open models, and that Nvidia chief executive Jensen Huang went to Capitol Hill to lobby party leaders in support. Treasury secretary Scott Bessent has suggested the US could sanction Chinese AI firms over alleged intellectual property theft, while commerce secretary Howard Lutnick has received letters from startup founders asking him not to cut off access to open models. Trump, asked about new safety restrictions, said: "We have to be careful in both ways. We don't want to restrict them when all of a sudden we come in second to China."

Hardware is the other front. The Federal Communications Commission announced a ban on humanoid robots from China, alleging an unacceptable national security risk and warning the machines could steal data or surveil US citizens, The Guardian reported. A report that China had begun mass production of specialty chips key to the AI boom triggered a stock selloff that erased $1tn in market value from other chipmakers, according to the same account.

Legal pressure is building too. Huawei's US trial opened in Brooklyn federal court on Wednesday, where Justice Department attorney Taylor Stout told jurors: "Theft, lies, cover-up. For 20 years, that's how Huawei, a massive Chinese telecommunications company, victimized American companies and abused the American financial system." The government alleges Huawei conspired to steal trade secrets from five US companies, including router source code from Cisco Systems and a robotic arm from T-Mobile. Defence lawyer Brian Heberlig countered: "It's about competition, not conspiracy. Innovation, not theft." He said the Cisco and T-Mobile incidents were "actions by individual employees" and that management worked to make things right. The case, which began with a 2018 indictment, now includes racketeering charges and is expected to last three months.

China's own framing of all this is self-reliance. The Conversation notes that Xi Jinping stresses science and technology independence, or keji zili ziqiang, and that state-guided bodies back domestic platforms such as the OpenAtom Foundation and the code repository Gitee. Domestic operating systems openKylin and openEuler are meant to secure Chinese IT infrastructure. Some Chinese open-weight models carry bilingual licences, including the Mulan Permissive Software License 2.0 and the OpenAtom Model License 1.0, where the Chinese text prevails in disputes. That is the export question in miniature: not whether the technology is good, but whose rules travel with it.