Anyone who deals with manufacturing knows that China is dirt cheap and (nowadays) often better quality than domestic. Without the government propping up manufacturing, China could rug pull the US without even firing a shot.
China’s support is an order of magnitude more and essentially allows their companies to be unprofitable and not worry about.
Similar to how American VCs enabled Uber to unprofitably wipe out many countries taxi industries in a way that those taxi companies couldn’t compete with.
Also doesn't this kind of thinking leads to an argument that says US govt does not want it's own companies to compete with Chinese ones with these grants by use of limitations?
And another question would be as USA is more of a private enterprise type of a country why wouldn't these VC's and car companies cooperate for this competition?
This is not at all the case in China's EV sector. The EV sector is China is extremely cut-throat. BYD is not living off of government subsidies. It's an extremely competitive company that has invested heavily in R&D and which has reduced costs through vertical integration.
The issue is in getting the technology into the marketplace: between advertising, product positioning, dealerships, and consumer demand, that's where things fall apart.
I think that is actually a fair question, but it all comes down to what you optimize for. I think that the most efficient economic model could be some form of slave command economy.
That said, I think the bigger argument against central economic planning is that it further centralizes social and political power as well. This is prone to more drastic and oppressive failure modes.
Last, you talk about the speed of information, but that cuts both ways. Distributed systems can take advantage of this as well. Capitalist economies have booms and busts, but I would take them any day over great famines.