'Capacity' claims seen as attack on new sectors

The hyping up of the false narrative about China's so-called "overcapacity" by the United States is merely another attempt by the latter to attack and contain China's emerging industries, which will harm the US itself while causing disruption to global industrial chains, Wei Jianguo, former vice-minister of commerce, said in an exclusive interview with China Daily.

The senior trade expert said that despite pressure from the US, China must be confident and "firmly "develop the "new three" industries targeted by the false narrative, as well as other high-tech sectors and the digital economy, to accelerate the fostering of the new quality productive forces.

He also forecast that China will roll out more policy measures in the coming months to better attract foreign investors, improve the business environment and expand high-level opening-up, leveraging the advantages of its huge domestic market.

The "new three" industries refer to new energy vehicles, lithium batteries and photovoltaic products. The "overcapacity" rhetoric claims that due to government subsidies, China has exported many new energy products at low prices, hurting other economies.

Rebutting the "overcapacity "false narrative, Wei said that Chinese enterprises operate in line with laws and regulations, and the pricing of new energy products from China also conforms with international rules.

"The baseless accusation that China is dumping electric vehicles, solar power panels and other clean energy goods in overseas markets is a mean method of trade protectionism by the US," Wei said.

"The world needs China's exports of new energy products, which are of high quality at affordable prices."

For instance, the surge in China's NEV output, sales and exports, and the increasing presence of China's NEVs in a growing number of countries including Spain, Mexico, Russia and African nations, all dismissed such "overcapacity "claims, Wei said.

Citing industry data, Wei pointed out that the world should applaud the contributions China has been making to meet the surging global demand for new energy products.

In the first quarter of 2024, China's NEV output surged 28.2 percent year-on-year to nearly 2.12 million units, while its NEV sales climbed 31.8 percent from a year earlier to 2.09 million units. NEV exports reached 307,000 units in this period, up 23.8 percent year-on-year, according to the China Association of Automobile Manufacturers.

According to an estimate by the International Energy Agency, global demand for NEVs could reach 45 million units in 2030, more than triple the global sales volume in 2023 and 4.5 times that of 2022.

"The US is no longer an advocate of free trade. Instead, it is distorting the normal operations of the market as it tries to contain China through protectionist measures, bringing about an increasingly negative impact not only to itself but also to other economies," Wei said.

"Trade protectionism is one of the factors driving up inflation in the US. The US should fully recognize the inevitable growth of green and digital economies worldwide and expand win-win cooperation with China in related sectors, including NEVs, rather than curb and attack China's emerging industries.

"That way, it will play a positive role in global industrial chains and benefit from its own comparative advantages."

He added that China should accelerate the fostering of new quality productive forces to drive its modernization, as it faces persistent suppression from the US.

"We must be aware that the US will likely adopt various means and tricks to try to contain us, but it cannot change the development pathway and future of China. We must be more determined to achieve our development goals and better meet the market demand arising from economic globalization," the former official said.

In particular, he said that due to their strong innovation capability and flexibility, small and medium-sized tech enterprises will be a very important force for China to develop new quality productive forces, while further institutional opening-up will help those SMEs unleash their innovation potential.

"In the second quarter, I believe there will be clearer policy signals about further unleashing the potential of the pilot free-trade zones, reducing the number of items on negative lists for market entry, and strengthening protection of foreign investors and intellectual property rights," Wei said.

liuzhihua@chinadaily.com.cn