Recent assertions by some Western politicians and media outlets alleging that China is grappling with industrial overcapacity lack substantive data, according to leading analysts. These claims are being dismissed as politically motivated efforts to undermine China's economic standing amid increasing global trade protectionism.
Albert Park, chief economist at the Asian Development Bank, emphasized that the World Trade Organization has mechanisms like anti-dumping and countervailing duties to address non-competitive practices. However, Park pointed out a lack of strong evidence supporting these claims against China.
Wichai Kinchong Choi, senior vice president at Thailand's Kasikornbank, highlighted that the international success of China's emerging industries stems from innovation and efficient cost management, rather than excess capacity. Choi criticized developed nations for unfairly blaming China for their market challenges and imposing restrictions on competition.
Robin Xing, chief China economist at Morgan Stanley China, added that it is unjust to single out China's industrial policies and suggest that its competitive advantage is government-subsidized. Xing noted that many countries, including the United States, employ similar strategies to support strategic industries. He cited the U.S. Inflation Reduction Act as a significant investment in clean energy and subsidies for the semiconductor sector.
The debate is particularly relevant as global demand for new energy technologies, such as electric vehicles, is projected to soar. The International Energy Agency forecasts that demand for electric vehicles will reach 45 million by 2030, a more than fourfold increase from 2022 levels. Despite this surge, China exported 1.203 million new energy vehicles in 2023, indicating that its current capacity is insufficient to meet the anticipated global demand.
Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics, warned about the broader implications of the overcapacity narrative. Lardy argued that the idea of not producing more than what is consumed domestically could lead to disastrous consequences for global trade and economies.
Amid the approach of the U.S. elections, analysts like Guo Kai, executive president of the CF40 Institute, suggest that political motives are influencing the overcapacity debate. Guo remarked that the U.S. is highlighting the issue of Chinese overcapacity for electoral purposes.
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Analysts rebut 'Chinese overcapacity' claims amid political tensions
cgtn.com
