The Chinese government has directly countered criticisms from the United States and European countries regarding overproduction, asserting that protectionism poses a greater risk to the global economy.
On July 28, the Ministry of Commerce published a lengthy document on its website titled 'China's Position on So-Called Overproduction,' dismissing the controversy surrounding overproduction.
The ministry claimed, "Certain countries and economic blocs are politicizing trade and economic issues under the pretext of concerns about their own industries' competitiveness and market positions, thereby intensifying sanctions and protectionism against China due to its production capacity impacting the global market."
The document emphasized that there is no international consensus on the concept of 'overproduction,' stating, "The assessment of overproduction situations should be based on the development stage and level of each industry."
It also refuted claims linking overproduction to domestic demand shortfalls, state subsidies, and trade surpluses. The document highlighted that "there is no inherent correlation between industrial subsidies and overproduction," asserting that "reasonable industrial subsidies can address market failures and promote technological innovation and environmental protection."
Furthermore, the document argued that China's production capacity offers new opportunities for the global economy. While some have labeled the recent surge in Chinese solar panels and new energy vehicles in international markets as 'China Shock 2.0,' the ministry contended it should be viewed as 'China Opportunity 2.0.'
It claimed that China's production capacity can foster global innovation cooperation and technological advancement, accelerate the green and low-carbon transition worldwide, and support the industrialization of developing countries.
The document also pointed out that "protectionism only disrupts the global economy and trade order, and does not contribute to the security and stability of global supply chains or the healthy and orderly development of industrial cooperation."
During a regular briefing on the same day, Yan Dong, Deputy Minister of Commerce, stated, "Certain economic blocs have exaggerated China's so-called overproduction issue," adding that the document aims to correct the facts.
This statement from China comes as the U.S. and the European Union have intensified their pressure on China over concerns regarding overproduction and trade imbalances.
The Office of the United States Trade Representative (USTR) initiated an investigation in March into what it termed 'structural overproduction' involving 16 economies, including China. China and the EU are also engaged in negotiations to address trade imbalances, with both sides reportedly setting October as a key deadline for finding solutions.
China's document appears to be a proactive response to increasing regulations on its competitive products, such as electric vehicles and solar panels, in the European market.
Chui Pan, a professor at the University of International Business and Economics, told Global Times on July 28 that the timing of this statement is crucial for correcting misunderstandings, emphasizing that the decline in industrial competitiveness in some countries is not due to China's 'overproduction' or industrial subsidies.
However, some analysts argue that the document may not sufficiently address the concerns of the U.S. and EU regarding overproduction. Alicia Garcia-Herrero, Chief Economist for Asia-Pacific at Natixis, stated in the Nihon Keizai Shimbun that while the document provides an official rebuttal and data from Beijing, the USTR is likely to treat it as a defense rather than new evidence that could change legal or political dynamics.
She added that while the document could serve as a reference in future negotiations between China and the EU, the fundamental concerns of the EU remain, making it difficult for a single document to alter the direction of negotiations.
* This article has been translated by AI.
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