It soared 34% on its first day of listing in the United States! China’s “overcapacity theory” was severely slapped in the face by capital
China's "overcapacity theory" has been severely slapped in the face by capital.
On May 10, Eastern Time in the United States, Chinese new energy vehicle company Ji Krypton was listed on the New York Stock Exchange. It took only 37 months from brand launch to IPO, setting a new record for the fastest listing in the history of Chinese new energy vehicle companies. On the first day of listing, its share price soared by more than 34%.
This is also the largest IPO for a Chinese company to raise funds in the U.S. market since 2021. Because it was oversubscribed, Ji Krypton expanded the size of its IPO.
The over-subscription and sharp rise in stock prices reflect the world market's recognition of the strength and prospects of China's new energy vehicles. This is not only an example of China's new energy vehicle companies accelerating their globalization, but also helps the capital market re-evaluate the global value of China's new energy vehicles.
The market's enthusiasm for Chinese new energy vehicles can also be seen in Europe.
Chen Wenling, chief economist of the China Center for International Economic Exchanges, who recently visited France, Germany, Belgium and other European countries, told Sanlihe that Chinese new energy vehicles are very popular in Europe, and it can be said that supply exceeds demand. At one time, some consumers had to wait several months, sometimes half a year, before they could buy a car.
Not only in Europe and the United States, Chinese new energy vehicles are popular around the world. The global market has huge demand for new energy vehicles. According to estimates by the International Energy Agency, global demand for new energy vehicles will reach 45 million units in 2030, 4.5 times that of 2022.
According to data from the China Association of Automobile Manufacturers, global new energy vehicle sales in 2023 will be 14.65 million units, and China’s export sales to other countries will be 1.203 million units, accounting for only 8.2% of global new energy vehicle sales and 92.72 million total global vehicles. The proportion of sales is only 1.3%.
Currently, China's new energy products mainly meet domestic demand. In 2023, China's new energy vehicle exports will only account for 12.5% of total production.
However, some American and Western politicians ignore these objective facts and frequently hype up the theory of "China's overcapacity." They try to restrict the development and export of related industries in China, and even use this as an excuse to implement trade protectionism. According to media reports, the Biden administration is preparing to increase tariffs on clean energy products from China in the next few days, including a four-fold increase in taxes on Chinese electric vehicles.
Today, the successful listing of JiKrypton and the pursuit of Western capital, as well as global consumers' love for Chinese new energy vehicles, prove from different angles that the "China's overcapacity theory" is not popular.
In fact, the "China's overcapacity theory" is a false proposition. With the global emphasis on environmental protection and sustainable development, green demand is growing. China's new energy industry not only provides global enterprises and consumers with a green and smart production and living experience, alleviates global inflationary pressure, but also makes a huge contribution to the global response to climate change and green transformation.
According to Zhang Yansheng, chief researcher of the China Center for International Economic Exchanges, China's new energy products "go out" and hope that "everyone can eat."
But now some countries don't want China's new energy sources to have a living. Chen Wenling believes that new energy vehicles have been politicized by some politicians. They use the rhetoric of overcapacity to suppress China's new energy vehicles, hindering their entry into the international market, especially the European and American markets. On the other hand, it buys time for its own automobile transformation and transcendence to seize the next generation automobile market.
However, can we really develop ourselves better by taking protectionist measures and suppressing the development of other countries' new energy industries on the grounds of "overcapacity"?
History has repeatedly proven that trade protectionism harms others and does not benefit oneself, and there are no winners. As Bloomberg pointed out, the steel protectionist measures adopted by the United States over the past decade have not prevented the loss of jobs in the U.S. metal manufacturing industry. Instead, they have increased costs in other fields and reduced industry competitiveness.
Imposing tariffs on China's new energy products will not only fuel domestic inflation in the United States, but will also seriously harm the interests of low-income consumers. Aren’t the rights of low-income consumers rights?
"The promotion of trade protectionism will cause backlash and will eventually shoot itself in the foot." The National Development and Reform Commission recently wrote an article pointing out that in today's era, economic globalization is a general trend, and countries are interdependent and integrated communities of interests that are open, inclusive, and Win-win cooperation is the only right choice.
