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Communist China Dumps Cheap Gas-Powered Cars Globally
Jan 29, 2026 / Written by: Gary Isbell
The communist Chinese want to dominate both the electric and gas-powered car markets worldwide. To do this, it is pursuing a brutal strategy.
Here is what happened. Chinese gas-powered automakers saw their domestic sales drop sharply as the push for government-subsidized EVs increased. This led to overcapacity, leaving gas-powered car production lines idle.
Beijing’s response was to restart gas-powered car production and flood the market. It is undercutting competitors by selling cheap products made with very poorly paid labor.
While Western policymakers focused on tariffs on Chinese-subsidized EVs, they are not paying attention to the gas-powered markets. Everywhere, China is dumping its gas-powered cars on the market that it cannot sell at home.
These vehicles accounted for a staggering 76 percent of Chinese auto exports since 2020, rising from one million to over 6.5 million shipments in 2025. Consultants predict Chinese automakers will command 30 percent of the global auto industry within five years.
China’s gasoline-vehicle exports alone were enough to make it the world’s largest auto-exporting nation by volume in 2024.
China Threatens Competition with Stolen Western Technology and Forced Labor
Among the largest exporters are state-owned giants such as SAIC, BAIC, Dongfeng and Changan. These companies traditionally relied on joint ventures with foreign automakers to gain access to technologies they were incapable of developing on their own in the 80s.
Now, these state-owned companies are taking business away from their former partners both in China and in export markets.
For example, SAIC’s exports grew from nearly 400,000 in 2020 to over a million in 2024. Dongfeng’s exports quadrupled, leaving the Honda and Nissan brands to collapse in China because Beijing no longer needs them. Since Chinese automakers are state-owned, their survival is assured by the CCP coffers, regardless of market health.
Beijing asserts it is building a green future at home while funding it by keeping the rest of the world dependent on gasoline. This is achieved by selling government-subsidized cars and paying the average auto worker an annual wage of ¥106,023, which is about $658, or $0.34 per hour. This is how communism treats “the people” it claims to serve. 1
China’s government has used a variety of unfair tactics, including cheap labor, to grow its automotive industry, and the United States turns a blind eye and deals with it by imposing tariffs. Chinese autos, as well as parts made for other brands, have parts made with Uyghur forced labor. 2
Its path to global automotive dominance is paved in part by “cooking the books.” A helping hand from the government, in the form of low-interest loans and other financial benefits, gives domestic automakers a rather convenient cost advantage over their international rivals.
Then there is the curious case of the “zero-mileage used car,” where new cars are sold as used. According to China’s new sales strategy, brand-new cars are magically sold as “used” to meet domestic targets, unlocking tax rebates or investment along the way. 3
Beyond these homegrown advantages, there is the debacle of market entry for foreign companies into a communist-controlled market. Foreign companies have historically found that the price of admission to the Chinese market includes an “obligatory” transfer of their hard-earned technology to local partners.
In an environment where government intervention distorts market signals, CCP-controlled companies can sustain practices that would be laughably unprofitable in a truly free market.
Adverse Reactions to Flooding the Market
Thus, China is dumping its gas-powered cars on global markets.
In Warsaw, for example, new gas SUVs with “Beijing” logos line dealerships. In the developing world, China focuses on cheaper cars with older technology, leaving giants like VW and GM with pricing that is impossible to compete with.
Meanwhile, in Chile, Chinese automakers have captured nearly a third of the gas-powered market, wiping out sales for Nissan and Volkswagen almost entirely. In Uruguay, Dongfeng sells a pickup that is essentially a Chinese knock-off of the Nissan Frontier for two-thirds of the price, making it a difficult decision to buy Japanese-quality.
However, China is now running into obstacles. Russia, which was once a key market, doubled import fees after China flooded its auto market, causing exports to drop. South Africa is taking similar steps by encouraging local manufacturing and threatening new tariffs. China’s efforts to dominate the global auto market are ruffling more than a few feathers, as local manufacturers see this as “warfare” and are fighting back aggressively.
Sneaking Into the U.S. Market Through Mexico
China’s biggest export market is Mexico—disturbingly close to the U.S. for comfort. Chinese automakers are projected to end the year with a 14 percent market share south of the border. This will take a serious bite out of the sales of traditional brands like Ford, Chevrolet and Volkswagen. In response, Mexico increased tariffs on Chinese cars to 50 percent, a move analysts view as a frantic effort to appease Washington and prevent Beijing from using Mexico as a backdoor around U.S. trade barriers.
It seems Chinese automakers are playing a deceitful game of hopscotch, setting up shop in Mexico to leapfrog into the U.S. This is a brash move, one that demands serious attention from U.S. and Mexican policymakers.
If China gains a foothold in the U.S. market, it would deal a serious blow to American automakers competing with a country that honors no rules.
American officials need to dust off the old trade enforcement toolbox, plugging those leaky United States–Mexico–Canada Agreement (USMCA) loopholes, ensuring that forced labor is kept out of U.S. supply chains, increasing incentives for products genuinely made here, and stopping funding for a despotic regime.
Because really, wouldn’t it be nice if “American Made” meant a little more than a sticker?
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