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Swiss media: Western complaint over 'China's overcapacity' hypocritical, shortsighted

2024-04-22 Editor : Mo Honge ECNS App Download

(ECNS) -- Peter Fischer, chief economist at Neue Zürcher Zeitung, penned an article on Friday titled "China's 'overcapacity': Western complaint is hypocritical and shortsighted," criticizing the bias of some Western countries. 

"What does overcapacity mean? Are Western exports to Asia also called overcapacity? What kind of trade would it be if every country only produced for its own market?" asked Fischer.

Italian and French car manufacturers have long taken the upcoming switch to electromobility too lightly. Now they are demanding that the EU Commission restrict the import of Chinese electric cars, claiming these are being dumped on the market at dumping prices, he noted.

Something similar is happening in the U.S., Fischer cited examples like Tesla.

Elon Musk's Tesla basked in (marketing) success for a long time. Now, the company is being overtaken in the Chinese market by new manufacturers that offer a broader range of models, understand the car as more than just a vehicle, and have caught up in processing quality.

U.S. Treasury Secretary Janet Yellen is also very concerned that China's industry is "producing too much and could therefore flood the world market with cheaper industrial products."

He called for competition to do its work. "China has developed rapidly over the past decades with export-driven growth. As a result, it has become too expensive as a location for the production of inexpensive goods."

He also pointed out that complaining about Chinese subsidies is quite hypocritical.

The Global Trade Alert of the University of St. Gallen and New Industrial Policy Observatory meticulously track protectionist measures. If a few years ago the U.S. was more subsidy-friendly than EU countries, the tide has since turned. China, on the other hand, has not kept up in terms of quantity, Fischer said.

He suggested that if the West can purchase solar panels and wind turbines at lower prices and if innovative Chinese electric cars force European manufacturers to improve, consumers should be pleased.

Fischer said the best thing Western countries could do is to face the competition. 

"Overcapacity is a temporary phenomenon that the market would correct if you let it be. Protectionism prevents this," Fischer concluded.

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