In recent months, Western nations, particularly the U.S. and the EU, have voiced concerns over China's alleged \"overcapacity\" in green industries. European Commission President Ursula von der Leyen, during an April 9 press conference, emphasized the EU's need to adopt a stringent stance in its dialogues with China, citing unfair trade practices.
However, experts argue that the West's anxiety about China's overcapacity is unfounded. Protectionist measures targeting Chinese exports under the guise of addressing overcapacity might not bolster Western industrial competitiveness. Instead, these actions could dampen innovation among domestic enterprises and destabilize global supply chains, potentially hindering the global economy's green transformation.
For the EU, prioritizing concerns about China's overcapacity over its own economic restructuring could be detrimental. From the 1980s until the 2008 financial crisis, several EU member states underestimated the importance of manufacturing, accelerating a trend of de-industrialization. Despite launching a \"re-industrialization\" strategy in 2012 aimed at increasing the manufacturing sector's contribution to GDP, challenges like the European sovereign debt crisis and Brexit hindered progress, leaving the share stagnant.
The Russia-Ukraine conflict further exacerbated Europe's de-industrialization woes. Elevated energy prices and inflation significantly increased operational costs for businesses, leading to a surge in corporate insolvencies. Many companies are relocating to regions with lower energy costs, with major firms like Siemens increasing investments in the U.S. This shift, coupled with high operational costs, has made it challenging for the EU's green industries to enhance their competitiveness.
Additionally, the EU faces delays in key digital economy sectors such as artificial intelligence, big data, and semiconductors. These gaps limit the EU's ability to innovate in smart driving systems, putting European automakers at a disadvantage in the electric vehicle market.
Amidst these challenges, China's capacity in green industries presents an opportunity for collaboration. China is positioned to complement the EU's strengths, fostering partnerships that could drive the global green transformation forward.
Reference(s):
Hyping up China's 'overcapacity' does no good to EU competitiveness
cgtn.com
