Recently, some politicians and media in the United States and the West have thrown out another point of view attacking China: the so-called "China's excess capacity impacts the world market".
During a recent visit to China, U.S. Treasury Secretary Janet Yellen attended an event at the American Chamber of Commerce in China in Guangzhou, noting that she is particularly concerned about the problem of overcapacity, including signs of overcapacity in emerging areas.
Earlier, on March 27, Yellen accused China's new energy industry of so-called "overcapacity" during a visit to a photovoltaic cell factory in Georgia, saying that "China's overcapacity disrupts global prices and production patterns and harms the interests of American companies and workers."
Is China's production capacity excessive? What is the intention of the United States in accusing China of so-called "overcapacity"?
Is there excess capacity in China?
First of all, in the context of globalization, judging whether there is excess capacity should be judged from the perspective of global market demand and future development potential.
On April 8, at a briefing in Beijing, Liao Min, vice minister of finance of China, said that taking new energy vehicles as an example, according to the International Energy Agency's estimates, the global demand for new energy vehicles will reach 45 million in 2030, 4.5 times that of 2022, and the global demand for new photovoltaic capacity will reach 820 gigawatts, about four times that of 2022. The current production capacity is far from meeting the market demand, especially the potential demand for new energy products in many developing countries.
Second, attacking China's "overcapacity" from the perspective of government subsidies is a double-standard behavior.
On the one hand, the United States accuses China's new energy industry of relying on government support to lead to the so-called "overcapacity", while on the other hand, it has continuously introduced industrial policies to support the development of its new energy industry. On April 17 last year, the U.S. government issued the details of the Inflation Reduction Act, which stipulates that only electric vehicles that are eventually assembled in North America can receive a subsidy of up to $7,500 in the form of a tax deduction.
Li Daokui, dean of the Institute of Chinese Economic Thought and Practice at Tsinghua University, said, "There is hardly an exception in modern economies, and any country that wants to develop its own important industry is initially subsidized by the government." It is equivalent to riding a horse, first help the horse, and give it a ride. If the industry is built, there is no need for subsidies; if the industry cannot be built, subsidies will not be given, that is, it will be left to fend for itself. This is almost the most basic law of industrial development in modern countries. ”
Li Daokui also mentioned the US chip bill, "Isn't it obvious that the production subsidies and R&D subsidies given to chip companies in the United States are clearly telling the world that Americans want to subsidize their own chip industry?
Not long ago, China's Minister of Commerce Wang Wentao presided over a roundtable meeting of Chinese-funded electric vehicle enterprises in Europe in Paris, France, Wang Wentao said that China's electric vehicle companies rely on continuous technological innovation, perfect production and supply chain system and full market competition for rapid development, not relying on subsidies to gain competitive advantage, the United States and Europe and other accusations of "overcapacity" are groundless.
Finally, the so-called "overcapacity" is essentially still promoting the so-called "de-Chinaization".
Diao Daming, a professor at the School of International Relations of the Chinese University, said that the so-called "overcapacity" hyped by the United States is to continue to contain China in the economic and trade fields in a vain attempt to hinder the normal development of China's related industries, which is essentially another so-called "de-Sinicization" trick.
The development of electric vehicles in the United States is slowing
Responsibility in China?
The United States accuses China of so-called "overcapacity", and there is a problem behind the United States itself - the slowdown in the development of electric vehicles in the United States for many reasons.
First, the construction of charging facilities in the United States is slow.
U.S. President Joe Biden signed the Bipartisan Infrastructure Act into law in November 2021, pledging $7.5 billion to build a nationwide electric vehicle charging network to encourage people to buy and use electric vehicles, and set a goal of "building 500,000 public charging piles by 2030."
However, more than two years later, only four states in the United States have built and put into operation a total of 7 public charging stations, with a total of 38 charging stations. Another four states are building public charging stations, and 12 states have selected construction contractors.
A spokesman for the Federal Highway Agency defended the slow construction in an email: "We are building a national EV charging network from scratch, and we want to get it done." "The bureau has developed project guidance and guided state governments to develop implementation plans, and it is expected that the construction of charging stations in each state will be accelerated.
Motor vehicle emissions are the largest source of greenhouse gases in the United States. The Associated Press pointed out that 500,000 public charging piles cannot meet Biden's requirements to combat climate change. The U.S. Department of Energy estimates that the U.S. will need 1.2 million public charging stations by 2030, and there are only about 168,000 public charging stations in the country.
Second, the price of electric vehicles in the United States is higher.
The high cost of on-board batteries has led to a decrease in the price competitiveness of electric vehicles in the United States. In January this year, data showed that the average price of an electric car in the United States was $60,544, about $13,000 (about 92,000 yuan) higher than that of a fuel car. According to media statistics, in the United States, the choice of electric vehicles under $40,000 is only 1/10 of the models on sale.
△ A survey of 250,000 U.S. car consumers shows that more than half of consumers are not interested in buying and leasing electric vehicles in 2023, reaching 50.7%.
Some analysts pointed out that the transition from fuel vehicles to electric vehicles is still a major development trend, which itself is unstoppable, but in 2024, automakers may also need to attract consumers through measures such as price cuts.
Third, the influence of political factors.
2024 is an election year in the United States, and the automotive industry has a lot of influence on the election.
Michigan, home to the United Auto Workers (UAW), is a key battleground in the presidential election, with nearly 400,000 members.
Last spring, after the EPA proposed new emissions limits, Sean Fein, president of the United Auto Workers (UAW), publicly stated that he would no longer support Biden's re-election run because of "concerns about the transition to electric vehicles." The union has been wary of EVs because fewer workers are needed to assemble EVs and many EV factories are built in states with fewer unions.
The Biden administration eventually compromised with the unions. At the beginning of January this year, revised vehicle exhaust emission rules were introduced, and time limits were relaxed. A few weeks later, Fein announced his support for Biden's re-election. In March, the Biden administration again compromised for votes, slashing its target for EV adoption in the U.S. to 35% from 67% in 2032.
Fourth, the United States has implemented a "shutdown policy" in an attempt to exclude China's supply chain, which will affect the development of the electric vehicle industry in the United States to a certain extent.
Effective January 1, 2024, the U.S. electric vehicle tax deduction threshold will be raised. Under the U.S. Inflation Reduction Act, eligible U.S. electric vehicles are not allowed to contain any battery components manufactured or assembled by a Foreign Entity of Concern (FEOC) starting in 2024, and by 2025, the rule will also be extended to critical minerals such as lithium, cobalt, and nickel needed in battery manufacturing. The new rules are seen by many as targeting China.
Ji Xuehong, director of the Automotive Industry Innovation Research Center of North China University of Technology, said, "China has occupied about two-thirds of the global market share of electric vehicles, and has gradually built an electric vehicle industry chain with the most complete industrial chain, the most adequate competition and the highest degree of marketization. Against this backdrop, if the U.S. tries to exclude China's supply chains, it will be difficult to have alternative supply chains for some time. ”
At the same time, as competition in the global EV industry intensifies, the US is trying to bypass Chinese battery products, which will further drive up the cost of its homegrown EVs. Ji Xuehong believes that the "shutdown policy" of the United States will not only restrict Chinese enterprises, but also restrict the comprehensive competitiveness of local American enterprises.
Electric vehicles are a global industry, only the division of labor and cooperation can be mutually beneficial and win-win, and only fair competition can have technological progress. The politicization and security of economic and trade issues such as production capacity violates economic laws, is not conducive to domestic industries, and is not conducive to the stable development of the world economy.
Editor: Shu Mengqing
Source: Voice of China of China Central Radio and Television