'Overcapacity' cry bald protectionism

2024-04-20 10:16:58China Daily Editor : Li Yan ECNS App Download

Beijing rebuffed accusations from some U.S. politicians about China's industrial "overcapacity" on Friday, saying that behind the hyped-up theory was an intent to contain the world's second-largest economy's industrial development.

Foreign Ministry spokesman Lin Jian said at a news briefing on Friday that the claims from Washington about China's "overcapacity" are intended to "secure a more advantageous competitive position and market advantage for itself, representing blatant economic coercion and bullying".

The comment came after United States Treasury Secretary Janet Yellen raised concerns about the increase in China's investment in new industries, such as electric vehicles, lithium-ion batteries and solar panels.

Earlier, she claimed that China's industrial policy was creating substantial overinvestment that "hurts American firms and workers, as well as firms and workers around the world".

Lin responded by questioning whether U.S. exports of 80 percent of its especially high-end chips, as well as its substantial exports of pork and agricultural products, could also be called "overcapacity".

The proportion of China's new energy vehicle exports relative to production is much lower than that of Germany, Japan and South Korea, and does not constitute "overcapacity" or dumping overseas, he added.

According to data from the China Association of Automobile Manufacturers, China's first-quarter exports of NEVs reached 307,000 units, up 23.8 percent year-on-year. The nation's NEV production volume, meanwhile, reached 1.65 million units during the period.

The spokesman said China's new energy industry strength has been earned through genuine expertise, continuous technological innovation and ample market competition.

"Prescribing medicine for others does not cure one's own diseases," Lin said.

He went on to say that using "overcapacity" as an excuse for trade protection measures will not solve one's own problems.

"Instead, it will harm the stability of global production and supply chains, damage the growth of emerging industries, and undermine the joint efforts of the international community in addressing climate change and promoting green development," Lin said.

"We urge the U.S. side to abandon its hegemonic mindset, maintain an open attitude, adhere to fair competition, and follow the principles of the market economy and international trade rules to create a genuinely international, market-oriented and law-abiding trade cooperation environment."

Accusations from Western politicians about China's "overcapacity" in green technology and potential trade frictions in the sector have already fueled concerns about impacts on global green transitioning.

Bloomberg's David Fickling wrote in a column earlier this month that the U.S. is dragging out the same failed policy from a decade ago on China's steel industry "to support far more damaging barriers on clean technology, slowing our ability to halt the rise in global temperatures".

"What's being built isn't overcapacity, but merely the basic capacity the world needs if it's to build the low-emissions economy needed to get the planet to net zero," he wrote, referring to China's drive to expand the green sector.

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