South Korea is facing an uphill climb in getting Chinese subsidies for car batteries ahead of a bilateral meeting between industrial ministers on Thursday.
South Korean battery manufacturers have struggled to gain a foothold in the Chinese market at least since late 2016, when China's Ministry of Industry and Information Technology began to withdraw subsidies for Chinese electric cars that ran on batteries from South Korea's Samsung SDI and LG Chem Limited.
In South Korea, industry experts have said the ban on Korean batteries was a Chinese action taken as part of unofficial sanctions for Seoul's deployment of a U.S. THAAD missile defense on the peninsula.
On Wednesday, China posted online a list of car models that are to be subsidized, but the list did not include models like the Dongfeng KIA and the Dongfeng Renault that use LG Chem batteries, Yonhap reported Wednesday.
Subsidies are critical for Chinese electric car manufacturers, because state subsidies for electric vehicles can cover as much as half of the price of the cars.
The government decision to exclude Korean battery-powered cars for subsidies comes after China's Association of Automobile Manufacturers published a "white list" of high-performing companies that includes LG Chem, Samsung SDI and SK Innovation.
A South Korean industry source told Yonhap the policy does not reflect retaliatory measures, but rather a turn toward industrial protectionism in the world's second-largest economy.
A second Yonhap source said the situation might change after China's Industry Minister Miao Wei meets with his South Korean counterpart Paik Un-gyu Thursday.
Chinese car manufacturers that prefer Korean batteries have found ways around protectionist policies, however.
The Wall Street Journal reported Geely, a Chinese producer, established a subsidiary to license and make batteries identical to those of Korea's LG Chem.
Bloomberg reported in February China has increased subsidies overall for electric cars to make them more affordable to local consumers.
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