Some western countries are using the "overcapacity" narrative as an excuse to justify their protectionism and hobble the development of China's green industries, which goes against the prevailing trend of economic globalization, experts noted.
German Chancellor Olaf Scholz concluded his three-day official visit to China earlier this week, with a special focus on cooperation in new energy and green supply chain. After visiting a China-Germany hydrogen technology cooperation project in Chongqing Municipality, he was impressed by the bilateral cooperation in hydrogen technology, which offers a glimpse of the broad collaboration between China and Germany in green energy.
During his visit, Scholz made it clear that Germany and China need to expand cooperation in areas such as climate change and green transformation.
However, some politicians and media outlets in the United States and the European Union have constantly accused China of overcapacity in new energy products such as electric vehicles and dumping soc-called "cheap" exports on overseas markets, while ratcheting up trade restrictive measures.
Analysts in China believed it a "shortsighted" response to China's rising competitiveness.
"Now, facing an increasingly competitive China, Western economies are losing confidence more or less and want to use the so-called protectionist tools to cope with the so-called competitions from China. But I think this kind of response is very short-sighted," said Cui Hongjian, director of the Center of European Union and Regional Development Studies at Beijing Foreign Studies University.
The global sales of electric vehicles (EV) are expected to hit 45 million units in 2030, which is 4.5 times that of 2022, according to the International Energy Agency's forecast. The projection shows that the EV market still has huge growth potential, which is under the pressure of supply shortage rather than overcapacity. "The development of China's (new energy) industry has made global green transition possible. The lower prices only prove that China's manufacturers boast higher productivity. The so-called overcapacity in China's green industries is purely a prejudice and an excuse to hit China's green industries, which the whole world needs to develop," said Ju Jiandong, chair professor with PBC School of Finance at Tsinghua University.
Chinese Foreign Ministry also rejected charges of "overcapacity."
"The U.S. exports 80 percent of its chips, especially advanced chips and is a large exporter of pork and agricultural products. Is that 'overcapacity' according to U.S. logic? In fact, the ratio of export to production for Chinese new energy vehicle is far lower than that of Germany, Japan and the ROK. This is certainly not 'dumping extra products into the global market'," Foreign Ministry spokesman Lin Jian told a press briefing on Friday.
Chinese authorities said its green energy push will create opportunities for the rest of the world, calling for stronger international cooperation.
"In the context of economic globalization, both supply and demand are global. Countries have their own competitive industries, which are determined by their comparative advantages. Common growth can only be achieved by strengthening cooperation," Jin Xiandong, director of the Office of Policy Studies of the National Development and Reform Commission, told reporters on Wednesday.
Western 'overcapacity' accusation against China a protectionist rhetoric: experts
