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Opinion | China must rebalance economic development efforts to silence the West’s ‘overcapacity’ concerns
- Beijing sees US criticism of overcapacity as an excuse for Washington to ratchet up protectionist measures against Chinese-made products
- Concerns about industrial overcapacity has also spurred China’s leadership to look into a chronical imbalance in the nation’s economic development
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China’s industrial capacity has emerged as a new focal point of conflict between Beijing and Washington.
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The US government claims that China’s excessive industrial capacity in electric vehicles (EVs), solar panels and lithium-ion batteries is a situation that could wreak havoc on the global economy, while Beijing sees such criticism as an excuse for Washington to ratchet up protectionist measures against Chinese-made products.
Beijing remains unfazed by the US argument because China’s manufacturing capacity is primarily based on its economic advantages, not unfair state subsidies.
In the EV industry, for example, the major players are all privately owned. These companies have emerged as fierce rivals to US, German and Japanese carmakers because of their strong strategy, not state protection. At present, many Chinese EV makers with close ties to local governments are struggling to survive.
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‘Overtaking on a bend’: how China’s EV industry charged ahead to dominate the global market
‘Overtaking on a bend’: how China’s EV industry charged ahead to dominate the global market
The truth is that China can now make better and cheaper EVs, which is why BYD competes against Tesla for bragging rights as the world’s largest seller of “pure” battery powered EVs. Shenzhen-based BYD’s Qin Plus DM-i, which starts at 79,800 yuan (about US$11,000) after the latest round of price cuts, remains the country’s bestselling EV model, as other plug-in EVs in the market easily cost double.
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