U.S. Treasury Secretary Janet Yellen's visit to China, on the surface, is to discuss the issue of balanced economic growth and overcapacity, but in fact, it is to create a public opinion offensive for the United States to suppress China's new energy vehicles, photovoltaics and batteries and other emerging industries in the next step. This point is not difficult to see from some of the arguments made at the press conference held before Yellen left China, that the United States is fully prepared in this regard.
According to Reuters and other reports, Yellen held a press conference at the U.S. Embassy in China on April 8. At the meeting, Yellen expressed concern about China's weak domestic demand and excessive investment in emerging industries such as new energy vehicles, photovoltaics and batteries, which are heavily supported by the Chinese government. We've seen such narratives, she said. More than 10 years ago, the People's Republic of China (PRC) heavily supported the production of sub-cost Chinese steel, flooding the global market, destroying industries around the world and in the United States. I've made it clear that President Biden and I will not accept a re-enactment.
These words could not be more naked. Because, in the new energy vehicles, photovoltaics, and battery tracks, Chinese companies already have the ability to compete with any country in the world, especially with the United States, and in some aspects, they can also lead the world. For the United States, it is obviously unacceptable and intolerable, and it needs to find various reasons to suppress Chinese companies and products, and will use all means to pull the so-called allies together to suppress, encircle and sanction. In such a situation, it will be a very serious challenge for China's new energy vehicles.
The fact is that China's new energy vehicles have finally stepped out of the technical barriers, just out of a road that belongs to Chinese enterprises, and the minefield of "geopolitics" has appeared again. Moreover, the "geopolitical" minefield laid by the United States is to use overcapacity as an excuse to use the impact of the global supply chain system to suppress China and suppress Chinese enterprises.
In fact, the so-called overcapacity is just a unilateral rhetoric of the United States, and it is also a consistent trick of the United States to "add crimes." Not only China does not believe it, but other countries do not believe it, and even the US media itself does not believe it. For example, Bloomberg recently published an analysis report questioning the United States' accusation of overcapacity of China's new energy vehicles. According to the report, in the field of electric vehicles, the capacity utilization rate of the vast majority of China's top auto exporters is at an internationally recognized normal level, and the problem faced by the United States and Europe is that their corporate efficiency is not as good as that of Chinese companies, rather than China's "overcapacity". The report also believes that China is the world's largest market for new energy vehicles and hybrid vehicles, and the proportion of product exports in total production is much lower than that of major auto producers such as Germany, Japan and South Korea. If there is indeed "overcapacity" in China, it could lead to a large number of parking lots filled with unsold new cars. However, Bloomberg's analysis of public information of listed companies and industry associations shows that the inventory of Chinese auto dealers is not high, and it is impossible to conclude that there is "overcapacity".
You know, Bloomberg is a media that publishes negative news and negative comments about China and helps the U.S. government sing praises, and even Bloomberg has questioned the overcapacity of China's new energy vehicle industry proposed by the United States, which shows how serious and terrible the "crime of wanting to add" the United States on this issue is. Because of the lack of competitiveness of new energy vehicle companies in their own countries, they want to maintain the advantages of American companies by suppressing companies in other countries, which is obviously not in line with the rules of market competition and is not conducive to market fairness. According to the logic of the US government, is the United States already seriously overcapacity in the field of chips, especially high-end chips? Because, including NVIDIA, most of the chips produced are sold abroad. Because there are many products sold abroad, it is overcapacity, so the US government will first impose sanctions on American chip companies.
In particular, we need to refute Yellen's assertion that China's massive support for producing sub-cost Chinese steel has flooded the global market and destroyed industries around the world and in the United States. A very important reason why China's steel production capacity has increased significantly is that Western countries led by the United States have engaged in industrial transfer, and have shifted a large number of low-end, high-energy-consuming, and high-risk industries to developing countries, especially China, India, and Vietnam. For a long time after that, the United States enjoyed the provision of cheap, high-quality steel from developing countries such as China, which brought great benefits to American companies and residents. The United States is not only not grateful to China, but instead eats milk and scolds its mother, believing that it is really an act of unfilial piety to destroy industries around the world and the United States. As an economist, if Yellen does not even understand this truth, how can she be qualified to be an economist? If China had not provided the United States with a large number of low-cost and high-quality products, would the United States have been able to enjoy the maximum benefits of high technology so comfortably?
You must know that China's steel price is cheap, which is inseparable from China's low labor cost and low resource cost, as well as the labor efficiency and ideological consciousness of Chinese workers. Therefore, it is a pipe dream to use overcapacity to suppress China's new energy vehicles and other emerging industries, and it is impossible to succeed, and the Chinese government and enterprises will certainly actively respond to it, fight back, and wade through the "geopolitical" minefield planted by the United States at the lowest cost.