What is the purpose of hyping China’s new energy “overcapacity”?

In recent times, in the absence of factual basis, the United States has tried its best to exaggerate the so-called "overcapacity" of China's new energy, causing some countries to follow suit and speculate. The real purpose of doing this can be said to be obvious to everyone.

The biggest attempt to hype up China’s new energy “overcapacity” is to contain and suppress China’s advantageous industries. The United States has regarded China as its most serious strategic competitor. In the economic field, the United States is trying to suppress China's high-tech industries and strategic emerging industries. The new energy industry is related to green and low-carbon transformation and future development, and will inevitably become the focus of the United States' competition and containment of China. In recent years, China's new energy industry has been booming. The "three new" products represented by new energy vehicles, lithium batteries, and photovoltaic products are selling well all over the world. They have formed certain international competitive advantages through technological innovation, production efficiency and excellent quality. During this year's Canton Fair, some European and American import buyers said that the whole world is interested in Chinese green technologies. China is the global leader in the field of new energy vehicles and they hope to purchase more new energy vehicle products here. Earlier this year, journalist and author Henry Sanderson wrote an article in the US "Foreign Affairs" magazine and pointed out that the West is far behind China in the new energy industry. Now China is not only at the forefront in production and application, but also in technological innovation. in this way. Bloomberg reported on April 2, citing the views of many experts, that the success of China's new energy industry is mainly due to factors such as technological innovation, good infrastructure, complete domestic industrial chains, low factor costs, etc., from export prices to production capacity utilization. In terms of production rates and inventory, China’s new energy vehicles do not have overcapacity problems. Among them, the capacity utilization rates of several new energy vehicle companies with the largest export volume are above 80%. The U.S. government turns a blind eye to these facts, maliciously hypes up the argument of "overcapacity" in China's new energy industry, distorts and accuses China's industrial policies, generalizes the concept of national security, and attempts to unite its allies and partners to promote the decoupling and disconnection of China's new energy industry. The real purpose behind this is It is to use unfair non-market means to contain and suppress the development of China's advanced manufacturing and new energy industries.

The important purpose of hyping up China's new energy "overcapacity" is to support the development of domestic industries in the United States. Since the 1970s, the traditional manufacturing industry in the United States has accelerated its transfer to developing countries with lower costs, resulting in the hollowing out of the manufacturing industry. The proportion of manufacturing added value in U.S. GDP will drop from 22.7% in 1970 to 10.3% in 2022, and the proportion of manufacturing employment in total non-agricultural employment will drop from 24.5% to 8.4%. The 2008 international financial crisis revealed the dangers of the economy shifting from reality to reality. Since then, the U.S. government has begun to implement a reindustrialization strategy and vigorously promote the reshoring of manufacturing and the development of local industries. In the field of new energy, due to differences in governing philosophies, the US Democratic and Republican governments are hesitant between safeguarding traditional energy interests and promoting the development of clean energy. The policy "pendulum effect" has hindered the development of the new energy industry. First, it actively participated in international climate governance and reached the Paris Agreement on climate change, vigorously developing clean energy technology, and then announced its withdrawal from the Paris Agreement on climate change. Its energy policy tilted towards the traditional fossil energy industry. Recently, the United States has made major adjustments to its climate and energy policy. , the "Inflation Reduction Act" was introduced to provide subsidies of up to US$369 billion to industries such as new energy vehicles, charging piles, and photovoltaic equipment. Such repeated twists and turns have left many new energy companies in the United States at a loss as to what to do and missed important opportunities for industrial development. Against this background, the United States is concocting the argument about "overcapacity" in China's new energy industry, in the final analysis, to gain more time and space for the development of the domestic new energy industry in the United States.

Hyping up China's new energy "overcapacity" is also to serve the domestic political needs of the United States. Currently, there are many domestic economic and social contradictions in the United States. As domestic anxiety and wariness about China's continued development and growth intensify in the United States, using China as a "scapegoat", shifting conflicts outward, and blaming China has become a natural choice for domestic political correctness in the United States. This year is an election year in the United States, and the final election results will depend on the results in a few key swing states. According to the latest polls from the U.S. website "Real and Clear Politics", the support rates of the Democratic and Republican candidates in six key swing states, including Pennsylvania, Michigan, Georgia, Arizona, Wisconsin, and Nevada, are all around 45%, and the competition is extremely close. Traditional industries such as steel and fuel vehicles and new energy industries such as new energy vehicles, lithium batteries, and photovoltaics are important pillars supporting economic growth, employment and people's livelihood in the above-mentioned key swing states. Whether it is the steel industry in Pennsylvania, the fuel vehicle industry in Michigan, the photovoltaic industry in Georgia and Arizona, the new energy vehicle industry in Wisconsin, or the battery industry in Nevada, they are all facing pressure from international competition, including China. At this time, the argument of "overcapacity" in China's new energy sector is an important strategy that US election candidates need to adopt in order to win the election and cater to voters and stakeholders in key swing states.

Out of domestic economic and political needs, the United States ignores market laws and international rules and exaggerates and hypes China's "overcapacity" in new energy. This is a new excuse for economic anti-globalization and protectionism and unilateralism. A few other countries follow suit blindly out of their own short-term interests. This is not good for China, not good for the United States, not good for relevant countries, and not good for the entire world. Containing and suppressing the development of China's new energy industry will not make American domestic industries stronger. Instead, it will distort the international market and damage the efficiency of resource allocation. History has repeatedly proven that unilateralism and protectionism will only harm others and not benefit ourselves. Green and low-carbon transformation and addressing climate change are common challenges faced by the international community. The development of China's new energy industry is in line with the general trend of future development and will help countries around the world implement the United Nations 2030 Agenda for Sustainable Development and the goals of the Paris Agreement on climate change. It is hoped that the United States and a few other countries will stand at the height of a community with a shared future for mankind, proceed from the fundamental well-being of their own people and the people of the world, adhere to the principles of multilateralism and free trade, strengthen cooperation with China in the field of new energy, and join hands to address common global challenges.