China refutes Western criticisms of “overcapacity” in its new energy sector

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Wang Wenbin

24th April 2024 – (Beijing) China has vigorously dismissed recent criticisms from Western countries regarding alleged “overcapacity” in its industries, particularly within the new energy sector. This dismissal comes in response to assertions made in a communique issued by the G7 Foreign Ministers’ Meeting, which accused China of fostering market imbalances through non-market policies and practices.

During a daily press briefing, Chinese Foreign Ministry spokesperson Wang Wenbin defended the nation’s industrial strategy, particularly highlighting the advancements and essential nature of China’s new energy capabilities. “Our new energy sector is not about ‘overcapacity’; it is an essential, advanced capacity that drives green development globally,” Wang stated.

The spokesperson emphasised that China’s green technology and its burgeoning new energy industry are pivotal in addressing the global energy crisis and facilitating a transition to a low-carbon economy. According to Wang, these sectors are shaped by economic laws and market dynamics, not merely by governmental subsidies.

“China’s early start in new energy technologies, continuous investment in research and development, and an integrated network of supporting industries and human resources have endowed it with a competitive edge in the global market,” Wang explained.

Wang also tackled the notion of overcapacity as a misunderstanding of China’s market dynamics, suggesting that such accusations are often rooted in protectionism. He cited data from Bloomberg that indicates normal capacity usage rates in China’s electric vehicle (EV) sector compared to other leading automotive nations. Furthermore, Wang argued that China does not engage in the unfair trade practice of dumping, as the pricing of Chinese EV exports is governed by market principles.

The narrative of overcapacity, according to Wang, is a pretext used by some Western countries to justify protectionist barriers against Chinese exports. “Restricting exports from China’s new energy sector would be detrimental to all stakeholders involved,” he remarked.

In his closing statements, Wang reiterated China’s commitment to an open international economic environment. “China upholds its policy of openness and seeks to foster fair competition and mutual benefits through cooperation,” he said. Wang expressed hope that other nations would remain open to cooperation, adhere to market economy principles, and maintain fair and non-discriminatory practices towards Chinese enterprises.