Yellen's visit to China has become one of the phenomenal public opinion on the Internet in recent days, many netizens discuss the details of her visit to China, some praise and some criticism, no matter what, Yellen represents the interests of the United States behind her, from the "overcapacity" she always mentions, it can be seen that not only hopes that China will reduce production capacity, but also wants to make China's industrial and supply chain regress to the extent that the United States wants. However, China has been-for-tat, not giving Yellen the upper hand at all, and has made continuous countermeasures, with the aim of exposing Yellen's false proposition of "overcapacity" and making its own position clear.
In the past few days, Yellen has repeatedly mentioned the issue of China's "overcapacity", which seems to have a tendency to hype up the topic of China's economy and intend to put pressure on China. According to CCTV News, after Yellen arrived in China on April 5, she pointed the finger at China's "overcapacity" in a roundtable discussion with representatives of the American Chamber of Commerce. Not only that, but during a previous visit to a photovoltaic cell factory in Georgia, she mentioned China's "overcapacity," which she said disrupted global product prices and hurt American businesses and workers. Although Yellen is widely regarded as a "dove" in Biden's ruling team, she has recently set her sights on China's "new three things" for exports, and has repeatedly created momentum in the field of public opinion in an attempt to put pressure on China.
Yellen's purpose is very obvious, which is to force China to abandon its martial arts. Chinese enterprises in the new energy vehicles, power batteries and photovoltaic products in the industrial chain and supply chain are relatively complete, coupled with strong production capacity, domestic and international demand is very large, so objectively stimulated Chinese enterprises to accelerate the pace of development of the "new three". Yellen just wants to blame China in public opinion, and win over admirers and advocates in China's "show" to reverse the momentum of China's public opinion, in an attempt to become favorable to the United States.
Yellen took out the US definition of "overcapacity" and began to release rumors about Chinese products, which is very absurd. In the official context of the United States, as long as the production capacity exceeds the needs of domestic demand, it is "overcapacity", which is very narrow. The very simple truth is that if we only meet domestic demand, will there be bilateral or even multilateral trade? Since we are all engaged in the "self-production and self-sale" model of "domestic circulation" and "domestic consumption," we will not be able to talk about economic development and international trade.
In this era of economic globalization, it is the general trend to look at problems in accordance with the laws of the market economy, but the United States is moving against the tide in a vain attempt to "de-globalization," believing that the interests of enterprises and the jobs of workers have been robbed by Chinese enterprises. The so-called "overcapacity" is also a phenomenon of the law of value, market supply and demand are dynamically changing, and imbalance is the normal state of the market, which just shows that China is a market economy country, and the implementation of the principle of market economy will cause this very normal phenomenon to occur. According to the International Energy Agency, the global demand for new energy vehicles will reach 45 million in 2030, 4.5 times that of 2022, and there is still a huge gap between the supply and demand of the clean energy industry. However, the United States could not compete with China in the field of new energy, so it began to propagate false reasoning and heresies, and resorted to three indiscriminate tricks. However, China did not sit idly by, allowing Yellen's fallacies to confuse the public, and in just three days, China made continuous countermeasures.
The first move is to knock the US side. Almost at the same time as Yellen's visit to China, Wang Shouwen, the international trade negotiator and vice minister of the Ministry of Commerce, visited the United States from April 2 to 5 and convened a meeting of the China-US Business Working Group, focusing on the additional Section 301 tariffs imposed by the United States on China and related Section 301 investigation applications, generalizing national security, sanctioning Chinese companies, revising trade remedy investigation rules, two-way investment restrictions, and unfair treatment of Chinese enterprises. You must know that these solemn concerns mentioned by Wang Shouwen are the main means by which China has been suppressed and contained by the US government for many years, especially the so-called Section 301 tariffs and investigations, and the US can retaliate against national companies that it deems "unfair" according to its terms. During the Trump administration, the United States imposed retaliatory tariffs on about $370 billion of Chinese imports. After Biden took office, the United States intensified its efforts, generalized the concept of "national security", and imposed restrictions on artificial intelligence chips, semiconductors and other related high-tech fields. Wang Shouwen's remarks were an opportune blow to the US side at the right time, and for the sake of the overall situation of Sino-US relations and normal economic and trade exchanges, stop being stubborn.
The second move is to refute the US side. According to the Chinese Embassy in the United States, on April 5, Chinese Ambassador to the United States Xie Feng pointed out in an exclusive interview with Newsweek that some people accuse China of overcapacity as a threat to other countries, which is a false proposition. Globally, high-quality capacity is not excessive, but seriously insufficient. The vigorous development of China's new energy industry is actually rooted in the Chinese market, industrial system and technological innovation, as well as peer competition from the international market, and the standout of Chinese enterprises shows that China's new energy products are of excellent quality and rich experience, rather than the so-called fallacies such as "subsidy" and "low-price sales".
The third move is to respond to the United States. According to Xinhua News Agency, the leaders of the U.S.-China economic and trade sides, Vice Premier He Lifeng and Yellen, held several rounds of talks in Guangzhou on April 5 and 6, during which the Chinese side expressed serious concerns about the U.S. economic and trade restrictions on China and fully responded to the issue of production capacity. It can be seen that China has not shied away from Yellen's so-called "overcapacity" issue, but has responded in a bold and upright manner, which is not only a countermeasure to the US attempt to stir up public opinion, but also a reassuring pill for Chinese companies and the market.
The fourth move is to tell the US side. According to Xinhua News Agency, Chinese leaders met with Yellen at the Great Hall of the People in Beijing on the morning of April 7 and pointed out that "economic and trade issues should not be politicized and securitized", and "we should look at the issue of production capacity objectively and dialectically from a market perspective and a global perspective, starting from economic laws." However, although the Chinese leader has made China's position to the US with a pragmatic attitude and a spirit of cooperation, it is still unclear whether Yellen understands it or not, and to what extent she will implement this advice when she returns to China.
In short, according to the scientific analysis method of market laws, including capacity utilization, inventory level and profit margin, these three key indicators are maintained at normal levels, so there is no so-called "overcapacity" in China, but Yellen frequently mentions this "false proposition", the root cause of which is because the West is worried about "competitiveness", not the so-called "production capacity". In the past, it was talking about China's "trade protection", and later it was accusing China of "dumping at low prices", and now there is another "overcapacity", as long as it can suppress China, the United States will do everything it can, and I don't know what ridiculous excuses it will come up with in the future.