Yellen's arrival, what does it mean for Chinese PV companies?

According to the website of the Ministry of Finance on the 3rd, as agreed by China and the United States, US Secretary of the Treasury Janet Yellen will visit China from April 4 to 9.

On the 2nd local time, the website of the U.S. Department of the Treasury also issued a press release, saying that Yellen's visit to China will be based on her intensive diplomacy to responsibly manage bilateral economic relations and promote U.S. interests.

In terms of itinerary, on April 3, local time, Yellen will leave Washington for Guangzhou. On April 4, Yellen will arrive in Guangzhou and stay there until the afternoon of April 6. During her time, she will meet with Chinese officials, hold roundtable discussions with economic experts, participate in events hosted by the American Chamber of Commerce in China, meet with key representatives of the U.S. business community in China, and speak on bilateral economic relations. Later on April 6, Yellen will travel to Beijing.

Prior to her visit to China, Yellen had already engaged in a war of public opinion and psychological warfare. On Wednesday, Yellen publicly accused the continent's increased production of solar, electric vehicles and lithium-ion batteries for unfair competition for companies in the United States and around the world, "distorting global market prices" and harming businesses and workers outside China.

Green development is an intrinsic requirement of China's modernization, and China's efforts to contribute to the global energy transition are obvious to all. However, there are always some people who do not think so, and in photovoltaic, lithium battery, and new energy vehicles, they cannot compete with Chinese companies head-on, so they actually blame us for the contradiction: How can you produce things so well, and the key is to sell them so cheaply? You are so good, how can we live? This is the United States, which claims to be competing in the so-called fair and free market.

So, on this Qingming Festival, Yellen came.

01

Yellen's accusations

On March 27, U.S. Treasury Secretary Janet Yellen publicly criticized China's efforts in solar, electric vehicles, and lithium-ion batteries, saying that Chinese companies' capacity expansion in these areas is unfair competition, "distorts global prices," and "harms businesses and workers in the United States and around the world." ”

Yellen made the above remarks during a visit to a solar cell manufacturing plant called Suniva in Norcross, Georgia, USA. She made it clear that she would convey her views to China, "I will urge China to take the necessary measures to solve this problem." ”

According to the U.S. Treasury Department,

Suniva was forced to close in 2017, in large part due to the influx of cheap Chinese PV products into the U.S. market.

Today, the plant is alive thanks in large part to the U.S. government's Inflation Reduction Act (IRA). include

His

A number of U.S. green energy manufacturing industries, including Niva, have enjoyed tax credits and provided incentives.

The United States has been carrying out anti-dumping and anti-subsidy measures on the mainland's photovoltaic products. According to the principle of reciprocity according to the standards of the United States, is this IRA considered a subsidy? This is not just an open subsidy, but a huge amount, as high as $737 billion! Through the subsidy, a large number of enterprises that have completely lost their market competitiveness have been revived.

So, the local media in the United States also said,

Suniva

The rise and fall of the United States directly witnesses the impact of China's photovoltaic products on the United States, and also reflects the changes in Sino-US economic and trade relations from the side.

In the past decade, the United States has launched a series of unfair trade policies against Chinese photovoltaic products, such as the so-called "double anti-dumping", "anti-circumvention" and "Xinjiang-related", mostly for this reason.

"In the past, in industries such as steel and aluminum, Chinese government support has led to a lot of overinvestment and overcapacity, which have been exported abroad at low prices, and the result has been to maintain production and employment in these industries in China, but to shrink industries in other countries," Yellen said. ”

Yellen's view seems reasonable, because China's photovoltaic lithium battery new energy industry does have a stage of overcapacity.

But, in essence, these views are reversed. The hollowing out of America's own manufacturing,

One

Play karate straight and cut a round

Other companies' wool has now shrunk in their own manufacturing industry, and they have actually put the blame on Chinese companies.

According to the Financial Times, trade competition with China is one of the key issues affecting the 2024 US election. Georgia, where Yellen spoke, is one of the key swing states in the United States and is vigorously developing industries such as new energy vehicles in recent years. The reason why she made anti-common sense remarks did not rule out showing a tough stance on China, winning the support of relevant local industries, and seeking more votes for the US leader seeking re-election.

02

The power of entrepreneurs

In response to Yellen's views, Surab Gupta, a senior researcher at the Center for China-American Studies, said that China's green products rely on strong innovation capabilities and markets

The field competitiveness is in the leading position in the world, "with real comparative advantages and competitive advantages".

Gupta said that the large number of green products that China offers at cheaper prices "have become mainstream in the vast number of developing countries, and will greatly contribute to the global response to the climate challenge". Even more admirable, he said, is the government's determination to support green industries to open up large-scale markets, so that China's clean energy and green products are now cost-competitive, or will soon be able to compete with the high-emitting products that currently dominate the market.

Assuming that there is no stage of overcapacity in our photovoltaic industry, and the price of photovoltaic modules has risen to more than one dollar per watt, will European and American companies be able to compete with Chinese photovoltaic companies in terms of cost, technology, supply chain and application? The answer is obvious.

It is worth noting that shortly after Yellen's remarks, CATL began in-depth negotiations with General Motors of the United States to license lithium iron phosphate battery technology to the latter and discuss the possibility of establishing a joint factory in North America. 

In the complex geopolitical and international economic and trade relations, Chinese and American companies are the best lubricants.

What does an entrepreneur do? An entrepreneur does trade. Entrepreneurs are practitioners of market logic, and the globalization of the past 500 years is largely the result of the role of entrepreneurship. Entrepreneurs not only want to make money, but also want to conquer the world and have dreams of building a business empire. But they are not conquering with violence, but conquering consumers with better services, cheaper, higher quality products Conquering consumers is to make consumers live happier lives, not to make consumers feel frightened with violence. This is the difference between a business empire and a traditional empire.

Entrepreneurs are a force for peace. When there is a conflict between two countries, the merchant community is often a buffer, and their pragmatism philosophy can resolve many conflicts.

We know that before China's accession to the WTO in 2001, the US Congress had to examine every year whether or not to continue to grant China "most-favored-nation status." Before each review, many large US companies lobbied for China, while US trade unions always held an opposing attitude.

03

Keep a normal mind

In March 1983, American auto workers smashed a Toyota car during a protest

The mentality of European and American countries in the photovoltaic, lithium battery, and new energy vehicle industries, from trying to compete with Chinese companies, to repeated setbacks, and now to the near despair, has actually happened in the past one or two years.

02

023 is undoubtedly a big year for Chinese cars to go overseas, surpassing Japan and becoming the world's first for the first time, while China was only a quarter of Japan five years ago.

In the fourth quarter of last year, BYD also surpassed Tesla for the first time to become the world's largest seller of electric vehicles.

In fact, whether it is the battery bill initiated by Europe and the United States against Chinese companies, the Critical Minerals Alliance, or the "double reversal", we can see the root of it

quality, you will keep a normal mind.

History is a mirror. Before China, the United States also had a large-scale boycott of Japanese products. Once in the 1930s and once in the 1980s. Needless to say, the 1930s were on the eve of World War II, and then the United States and Japan went to war. The latter time,

01

In the 970s, Japanese industry posed a great threat to American industry.

The first to be hit was the U.S. auto industry, with the three major U.S. auto giants leading the way in declining profits and layoffs.

At that time, various T-shirts and car stickers printed with the words "boycott Japanese goods" and "second Pearl Harbor" were popular in the United States. An extreme case is, in

In 1982, a Chinese-American named Vincent Qin was even beaten to death by two white auto workers who mistook him for a Japanese. beauty

Later, Japan was forced to sign the Plaza Accord, and the Japanese economy fell into two decades of loss.

The more fierce the opponent's countermeasures and the more aggressive the means, the more it proves how good our company is. Today's Chinese new energy companies will certainly not be at the mercy of others like the Japanese companies of half a century ago.

postscript

Recently, Huawei Wenjie and Xiaomi have swiped the screen one after another, earning enough eyeballs and orders. Yesterday

Tesla announced that the first quarter of this year fell by nearly 9% year-on-year, the first quarterly delivery decline in nearly four years. The two messages are put together, very harsh,

The carbon number also thought of a widely circulated joke a few days ago:

Tesla has set up a factory in China, and the only official requirement of the Chinese government is to put the parts supply chain in China, and both sides are happy. Musk quickly solved the production capacity problem, but handed over the technical management and parts supply chain to China. In just a few years, China's new energy vehicles are roaring, realizing the dream of localization that traditional cars have not realized for decades, and overtaking in corners occupies a favorable position.

This paragraph said, Musk exclaimed: "If trade barriers are not established, Chinese car companies will almost destroy most of the world's car companies, and Chinese car companies are the most competitive car companies in the world." I think how successful they are going to be outside of China depends on what kind of tariffs or trade barriers we put in place. ”

Whether Musk exclaimed that it is difficult to distinguish between truth and falsehood, but his response to Rebus is true. Actually, no

only

It is for Chinese companies, Tesla discloses its patented technology to everyone, and no car company in the world can do it.

Of course, Tesla is also a beneficiary of openness and cooperation. middle

The Chinese market has become Tesla's second largest market after the United States.

In the past three years, the sales volume in the Chinese market were 320,700 units, 439,800 units and 603,700 units, respectively.

At the same time, the Shanghai Gigafactory is also Tesla's production center with the highest production capacity in the world. For the whole year of 2023, Tesla delivered 1,808,600 vehicles worldwide, of which 947,000 were produced at the Shanghai Gigafactory, which contributed more than half of Tesla's global production.

And most importantly, nearly one-third of the electric vehicles exported by China in 2023 are cars produced at Tesla's Shanghai factory.

Editor: Detective Carbon