Although the United States and other developed countries are determined to use the "theory of China's overcapacity" to suppress Chinese enterprises and Chinese products, they want to kill China's emerging industries such as electric vehicles, photovoltaics, and batteries. In particular, U.S. Treasury Secretary Janet Yellen, an economist, has repeatedly accused China of "overcapacity" in a way that goes against the conscience of economists. But all this is being reduced to an economic joke, an international joke, a joke of the times, a joke of history. Judging from the current remarks made by Yellen, there are at least three logical errors in the "theory of China's overcapacity".
The first logical error: the export of products is overcapacity. Yellen's logic is that China's electric vehicles, photovoltaics, batteries and other products need to be exported to the European and American markets, so they believe that there is overcapacity in China and require China to reduce production capacity. Otherwise, it hurts businesses and workers all over the world. We can't help but ask: The US Boeing Company exports more of its planes or uses more of its own aircraft, and whether Boeing has a serious overcapacity and should reduce its production capacity? In addition, whether the chips produced and manufactured by developed countries in Europe and the United States are mainly exported or used for their own use are also overcapacity and should be reduced. Obviously, this is a "double standard" and a "non-existent", and in the face of the rise of China's emerging industries, it wants to use the means of "overcapacity" to frantically suppress Chinese enterprises and Chinese products, and to curb China's economic development. It's just that it is logically wrong, even fatally wrong, and does not correspond to either the principles of economics or the logic of economics. Otherwise, according to Yellen's logic, all countries should maintain the pattern of self-production and self-consumption, and enterprises and agricultural producers should also be self-sufficient and return to primitive society, instead of commodity circulation and commodity trading. Otherwise, it's "overcapacity".
The second logical error: advanced technology is overcapacity. A very striking feature of Yellen's accusation of "overcapacity" in China is that the Chinese government has given subsidies to domestic clean energy industries such as electric vehicles and photovoltaics. Yellen claims that China's massive subsidies are designed to dominate the world in these industries. And Chinese products, which have become cheap because of subsidies, have had a negative impact on the United States and its allies. She even went so far as to say that China's move would distort the global market and hurt businesses and workers around the world.
So, what is the actual situation? An analysis report published by the US media Bloomberg not long ago questioned 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 electric 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".
In January this year, data showed that the average price of an electric car in the United States was $60,544, about $13,000 higher than that of a gasoline 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. Obviously, the problem is not in the Chinese government's subsidies for electric vehicles, but in the technical level and management capabilities of electric vehicles in the United States, and in the high cost of electric vehicles produced by American companies. It is no wonder that even European netizens cannot understand the accusation of China's "overcapacity" without looking for a reason, with a post below the relevant report on the Financial Times website read: "At first it was said that China was not doing enough in green energy, and now it is suddenly accusing them of doing too much." Why can't the United States shut up and do what it should do. ”
The third logical error: the causal relationship between overcapacity, the United States, and China. Because the products produced by Chinese enterprises have a high level of technology, low cost, and strong competitiveness, and the market competition pressure brought to American enterprises is great, they have shifted the responsibility to China, believing that the products produced by Chinese enterprises are "overcapacity" and will hurt American enterprises and workers. This logic no longer has much meaning of market economy and economic connotation. It's not that Yellen doesn't know, but she pretends not to. The reason is that the United States has regarded China as its strongest adversary, and it must suppress the products produced by Chinese companies, and it must contain the further growth of China's economic power. The so-called "overcapacity" is only a means for the United States to contain China's powerful goals. Obviously, it is impossible for China to agree, and the United States has said that it will not be counted. This kind of distortion of economic logic into political causality is obviously impossible to achieve. Such behavior, even if placed in "fuzzy economics", does not conform to the logical relationship and is a manifestation of "ugly economics".