The 2024 Group of Seven (G7) Summit, scheduled for June 13 to 15, will bring together the leaders of the seven member states along with representatives from the EU. As in previous years, mentions of the Chinese mainland are expected to feature prominently, reflecting ongoing discussions around international trade and economic policies.
Recent trade conflicts involving the Chinese mainland, the EU, and the U.S., along with insights from the recent meeting of G7 finance ministers and central bank governors, indicate potential focal points for the summit. One significant topic likely to be addressed is \"overcapacity.\" This term has been frequently used, particularly by the U.S., in relation to industries such as steel, aluminum, electric vehicles, solar cells, and semiconductors.
The concept of \"overcapacity\" has been a recurring theme in U.S. rhetoric, often cited without substantial evidence. For instance, on May 14, 2024, the U.S. increased tariffs on various Chinese clean energy products, including a dramatic rise in tariffs on electric vehicles from 25 percent to 100 percent. This move contrasts sharply with how similar economic activities in countries like Germany are treated. In 2023, Germany's exports made up about 40 percent of its GDP, whereas China's accounted for only about 3 percent. Despite this disparity, the U.S. refrains from labeling Germany as having \"overcapacity,\" highlighting a possible double standard in economic assessments.
Chinese electric automakers have made remarkable advancements in production and quality, challenging the notion of \"overcapacity.\" According to Chinese Minister of Commerce Wang Wentao, what is being termed as overcapacity actually reflects \"excessive anxiety.\" He argues that the hype surrounding \"overcapacity\" deviates from factual economic regulations and serves as a guise for protectionism, pressuring the Chinese mainland.
Another term that has gained traction is \"economic coercion,\" mentioned four times in the 2023 G7 communiqué. Although not explicitly linked to the Chinese mainland, it has been extensively used by the U.S. and the EU in their dealings with China. The U.S. interprets \"economic coercion\" as China's use of trade restrictions, sanctions, embargoes, and boycotts to influence behavior. The EU, through its Anti-Coercion Instrument, defines it as a third country attempting to pressure the EU or its member states by applying or threatening trade or investment measures.
Since the U.S. initiated the trade war against China in 2018, a series of actions have been taken, including punitive duties, stringent sanctions, export restrictions, and discriminatory investment practices. The EU has also implemented multiple trade defense measures targeting over ten Chinese industries. These actions raise questions about the legitimacy of the allegations, suggesting that the Chinese mainland may be the true victim of economic coercion.
Reference(s):
cgtn.com
