In a recent statement, U.S. Treasury Secretary Janet Yellen accused the Chinese mainland's new energy industry of overcapacity, asserting that \"China's overcapacity distorts global prices and production patterns and hurts American firms and workers.\"
However, Jin Ruiting, a researcher at the Academy of Macroeconomic Research of the National Development and Reform Commission, challenges these claims as unobjective and inaccurate. According to Ruiting, capacity levels are determined by the supply-demand balance, which naturally fluctuates in any market economy.
Analyzing capacity utilization indicators, industries related to new energy in the Chinese mainland, such as electrical machinery and equipment manufacturing and automobile manufacturing, exhibit utilization rates of 77% and 75% respectively. These figures align closely with the overall 75% utilization rate of China's manufacturing sector during the same period, indicating no overcapacity issues.
Bloomberg data supports this perspective, showing that leading Chinese automobile exporters maintain capacity utilization rates that are within internationally recognized normal levels.
Ruiting emphasizes that China's strengths in emerging industries arise from competitive market dynamics rather than government subsidies. Despite U.S. allegations of overcapacity tied to government support, the U.S. continues to implement industrial policies to bolster its own new energy sector. For instance, the Inflation Reduction Act's provisions state that only electric vehicles assembled in North America qualify for a maximum subsidy of $7,500 through federal tax deductions, a move criticized as blatantly discriminatory.
Reference(s):
Alleged 'overcapacity': Another example of suppression against China
cgtn.com
