Expert lists multiple mistakes in U.S. criticism of China's ‘overcapacity’

2024-04-23 Editor : Zhao Li ECNS App Download

(ECNS) -- There are multiple mistakes in the U.S. criticism of China's "overcapacity," said Guo Kai, executive president of China Finance 40 Institute, on Monday.

Guo pointed out at a forum that U.S. President Joe Biden declared in Michigan that measures would be taken against China's electric vehicles, while in Pennsylvania, he announced high tariffs on China's steel and aluminum.

He ascribed this to automobiles and steel being the dominant industries in these two states, which are crucial in the 2024 election. “Biden needs to secure the majority vote in these states to win the election. Especially when lagging in polls, he needs to take more aggressive measures,” he said.

Guo listed four mistakes in the U.S. political narrative.

Firstly, it takes the U.S. as an exception. The “impact” claimed to be caused to the U.S. by China's accession to the World Trade Organization did not occur in other countries, indicating that the U.S.'s problem lies within itself, Guo said.

Secondly, the U.S. focuses only on specific areas while ignoring the overall picture. Guo said the benefits brought by U.S. trade with China outweigh the losses. However, because industries and regions affected in the U.S. are more concentrated, the loss appears more direct than the gains, leading to the amplification of erroneous statements, he said.

Thirdly, the key reason for the decline in U.S. manufacturing, Guo said, is the advancement of technology and automation, not foreign trade. From a global perspective, the manufacturing workforce in all developed countries is declining.

Fourthly, even without China, low-end manufacturing would still shift from the U.S. to other places such as Mexico, Vietnam, and Indonesia, Guo added.

In addition, Angus Deaton, the U.S. Nobel Prize winner, has stated in an article that American policy and cognitive errors have led to insufficient social regulation, resulting in various social problems. This viewpoint has been acknowledged by the American economic community, but evidently, "attributing failure to others is more readily accepted."

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