US has no right to criticize others over subsidies, says former official

The largest industry subsidies in the world are being handed out in the United States and the country has no right to criticize other nations on the issue, said Zhu Guangyao, a former vice-minister of finance, at the two-day 2024 Tsinghua PBCSF Global Finance Forum that kicked off on Monday in Hangzhou, Zhejiang province.

Zhu emphasized that the US CHIPS and Science Act and the Inflation Reduction Act have implemented huge subsidies for chip enterprises and new industries, such as electric vehicle makers, to promote the return of advanced manufacturing to the US.

More than $52 billion out of the $280 billion provided by the US CHIPS and Science Act was used to subsidize chip enterprises building factories in the US. And, out of the $740 billion provided by the Inflation Reduction Act, $430 billion was for subsidizing new industries, such as electric vehicle makers, with subsidies for each electric vehicle reaching up to $7,500.

Zhu pointed out that, with the implementation of such huge economic stimulus, the US debt had risen sharply to $34.6 trillion and is expected to exceed $35 trillion before the end of June.

The annual interest expenditure on the US debt has now exceeded the nation's annual military expenditure, he stressed.

The monetary policies of the US have an external impact on the global economy, he said, adding that the world must return to the principles of multilateralism and strengthen international coordination of macroeconomic policies.

Meanwhile, it is also important to strengthen regional economic cooperation and policy coordination, and the Association of Southeast Asian Nations plus China, Japan, South Korea (10+3) economic and financial cooperation mechanism under such circumstances is of great significance, he said.