U.S. Secretary of State Antony Blinken will visit China on the 24th. Before his departure, the US side said that during Blinken's visit to China, he would express concern about China's new energy "overcapacity". Anyone who understands basic economic knowledge will find this argument not worth refuting. However, for some time now, the US has frequently hyped up the issue of "overcapacity" and used it as the latest tool of "economic cognitive warfare" against China.
First of all, some people in the United States link production capacity to international trade, believing that more export products means overcapacity. There is a fallacy here: equating product exports with "overcapacity" is not in line with economic common sense, and it is also contrary to the trend of globalization.
In a highly globalized economy, output and demand cannot be confined to a single country or region. Judging from the practice of various countries, it is common for the production capacity of a certain industry to exceed domestic demand, and it is normal for exports to be exported. For example, 80% of the chips produced in the United States and the cars produced in Germany are exported, and the passenger planes produced by Boeing and Airbus are also exported in large quantities. If we follow the logic of some people in the United States, people will ask, like the Swiss "Neue Zürcher Zeitung": "Is Western exports to Asia overcapacity?" If a country only produces for its own market, then how can trade begin?"
Perhaps in order to fill in the logical loophole, some people in the United States have given another explanation: China's new energy production capacity also exceeds global demand. According to the International Energy Agency, to achieve the goal of carbon neutrality, the global demand for new energy vehicles will reach 45 million in 2030, and the demand for new photovoltaic capacity will reach 820 gigawatts, about 4.5 times and 4 times that of 2022, respectively.
It can be seen that the current relevant production capacity is far from meeting the market demand, especially the potential demand for new energy products in the majority of developing countries. As the world's largest renewable energy market and equipment manufacturer, China's high-quality production capacity is not overcapacity, but the world urgently needs. As Brazilian buyers who participated in the 135th China Import and Export Fair told the International Review, China's good products are very popular in Brazil, and it is necessary for China to provide green production capacity.
At the same time, the US hype runs counter to the theory of comparative advantage in Western economics, which it believes in. According to this theory, if a country is able to produce a product at a lower cost, other countries should not erect tariff barriers, but should import the product while exporting its own comparative advantage. The reason why China's new energy products can form a comparative advantage is not because of government subsidies, but because of independent innovation of enterprises, complete industrial and supply chains, super-large-scale markets and abundant human resources. Rather than attacking China's new energy products for "distorting the global market", the US should amplify its own comparative advantage.
In addition, some in the United States have accused China's new energy industry of undermining American companies and workers. This is their fourth fallacy, that is, "the United States is sick, China takes medicine", which is intended to "shift the blame".
Bloomberg recently cited a report by the Global Wind Energy Council as pointing out that in the United States, the local supply chain of almost every complex component of a wind farm has encountered bottlenecks; In Europe, the same shortages will begin to spread this year and next. The article also points out that only in China is the supply chain sufficient for wind energy development to not slow down. This example shows that the development of the new energy industry in the United States and the West has its own problems.
Taking the strike of U.S. auto workers in the second half of last year as an example, the reason is not that China exports electric vehicles to the United States, but to a large extent because the "Inflation Reduction Act" introduced by the United States supports the transformation of car companies to new energy vehicles, resulting in traditional auto manufacturing workers facing unemployment pressure. It can be seen that "internal disease and external treatment" has been a habitual trick of the United States for a long time.
There is no shortage of economic experts like Yellen in the US Government, so why do they still hype up the so-called "overcapacity" argument knowing that it is untenable? Just as many analysts have pointed out, there are three key words behind this: "interests, votes, and hegemony."
Luo Siyi, former director of the London Economic and Business Policy Agency, recently wrote an article pointing out that the United States is worried that in international trade, more and more of its products will not be able to maintain the high-end position of the value chain. This shows the economic intention of the United States - to contain and suppress the development of China's emerging industries, and to seek a more favorable competitive position and market advantage for the country.
From a political point of view, this year is the year of the U.S. election, and U.S. leaders recently said in Michigan, one of the key states in the election, with automobiles as the leading industry, that they will take measures against China's electric vehicles. It can be seen that the so-called "overcapacity" theory thrown out by the US at this time is nothing more than a pretext for protectionism, and it is also used as a tool to win votes and seek personal gains.
From a deeper point of view, from the original targeting of China's traditional manufacturing industry to the current suppression of the new energy industry, the United States has repeatedly hyped up "overcapacity", reflecting the deep-rooted zero-sum thinking and the hegemonic logic of one dominant power. Looking at it from another angle, isn't this a reflection of the decline of American-style hegemony?
Some people in the US should be aware that hindering the entry of high-quality and cost-effective Chinese new energy products into the domestic market will not only harm the interests of consumers, but also drag down the global green transformation and the development of emerging industries. They have the energy to concoct false narratives, so they might as well find ways to improve their competitiveness.
(International Critic)
Source: CCTV news client
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