New anti-China narrative: overcapacity

During her visit to China at the beginning of April, US Treasury Secretary Janet Yellen expressed her concern about an alleged overcapacity in the Asian giant’s new energy sector.

In the last few weeks, this idea has been circulating in the Western media, accusing the Chinese government’s subsidies to energy sector companies as “unfair”.

The decision to subsidize an industrial sector is a national sovereignty judgement of the country and a common practice in international trade.

The fact is that Europe heavily subsidizes its agricultural sector (and has even been accused of dumping practices) and, historically, the United States has had a protectionist policy to boost its domestic industry, not to mention numerous economic “sanctions” on its rivals.

The bottom line is that both the US and Europe are concerned about the competition arising from China’s sweeping advance in the production of electric cars, solar panels, technology, and robotics – all of which are products at the core of China’s current industrial development.

The boost in China’s new energy industries is an opportunity for countries in the Global South, Dr Marco Fernandes, a researcher at the Tricontinental: Institute for Social Research, told CGTN in an interview. He emphasized that “…it is the first time that we have a major economy, such a strong economy in the Global South, so it is absolutely strategic” and that for developing countries it is “…a matter of trying to have balanced partnerships”.

China’s alleged overcapacity seems more of a threat to the traditional powers than to the world’s developing countries.

This in a clear sign of Beijing’s intentions to improve its ties with Europe, China has announced that it will reduce controls on agricultural products from some European countries including Germany, Spain, Belgium, and Austria.

Rather than “de-risk” (isolate) itself from trade with China, Europe should take the opportunity to strengthen its mutually beneficial economic links with China.

Source: edited extract from Dongsheng – News on China, April 27, 2024.

Read full article: Dongsheng, No 182.