In recent years, Western countries have frequently hyped up the so-called "overcapacity" issue, trying to use it as a pretext to suppress China's clean energy products. In the view of scholars, such claims not only lack credibility, but also reveal the declining status of Western countries in high-tech products and industrial production.
On July 5 local time, the Hong Kong-based newspaper The South China Morning Post published a commentary by Lu Gonghui, the chief development advisor at the Environmental Research Institute of the Hong Kong University of Science and Technology. She pointed out that while Europe repeatedly emphasizes the need for clean energy worldwide, it constantly complains about solar panels, wind turbines, batteries, and electric vehicles produced in China. This reflects the anxiety felt by the West over China's progress in green technology development.
The article states that the Brussels-based European think tank Bruegel Research Institute recently released a report, which suggests that China’s industrial policies have helped Chinese companies become leaders in global renewable energy technology. However, the cost is so-called “overcapacity and price declines.” The institution recommends that China consider “shifting more green investments from manufacturing to infrastructure.”
This report reflects the anxiety of some European economies regarding China’s green technology. Lu Gonghui believes that China’s success makes Europe feel “uneasy”. They worry that their own strategic industries might disappear, and in the future, they will have to rely on a single country for technology. She pointed out that these concerns are understandable, but they do not prove that China has violated any international rules.
Lu Gonghui stated that Western countries have long used the term 'overcapacity' to criticize China's green technology. However, this term obscures the issue. At an economic level, it refers to capacity exceeding profit requirements; at a political level, it refers to a country's industrial system being so strong that it has spillover effects, leading to 'domestic industrial policies becoming political issues abroad'.
The article states that there is no problem with producing goods that exceed the absorption capacity of domestic markets. Export-oriented growth has always been a key factor in the early development of many economies. Government subsidy policies are not illegal either. Both the United States and Europe provide subsidies for agriculture, aviation, and the semiconductor industry. Global trade rules do not prohibit subsidies, but they do impose restrictions in a few cases.
In the view of Lu Gonghui, what truly causes concern to Western countries is China's economic system and its vast manufacturing industry. The West regards China as a "strategic competitor," and they cannot accept China's capacity reshaping of the global market.
July 3rd, Matian Photovoltaic Power Station, Siding Town, Rong'an County, Liuzhou City, Guangxi
She refuted the views put forward by the Bruegel Institute, emphasizing that China has already moved up in the value chain. Solar panels, batteries, electric vehicles, and other clean energy products produced in China are not only cheap commodities but also “industries of the future”.
The article states: "Over the past few decades, China's low-cost manufacturing was seen as a boon of globalization. But when China began mass-producing high-tech products, the trend changed. What was once called 'efficiency' by the West is now referred to as 'overcapacity.' This is why the double standards of Western countries cannot be ignored."
When the United States or Europe provides subsidies to industries, they often use terms like "resilience," "green transformation," and "national security." However, when China provides subsidies, Western countries use terms like "distortion" and "overcapacity." Lu Gonghui believes that this difference has nothing to do with international trade rules; it is simply due to the West's anxiety about China's development of green technology.
The EU is considering introducing stricter "trade defense measures" against China, as well as promoting policies that encourage the purchase of European goods. These moves reflect Europe's anxiety, as it seeks to protect strategic industries and "does not want to lose the industrial foundation needed for its future economy."
However, the article points out that trade protection measures do not equate to industrial strategies. Europe may not be aware of a key issue: if Europe’s real problem is lack of competitiveness, then restricting China cannot replace industrial renewal.
Lu Gonghui stated that the repeated emphasis by Western countries on so-called 'overcapacity' reflects their dissatisfaction with China's industrial and technological rise. They find it difficult to tolerate the success achieved by China. If this dissatisfaction is not controlled, it could lead to an increase in global economic division.
She emphasized that green energy products produced in China are price-competitive, and their exports have continued to grow. These products have become a “climate opportunity” in the eyes of many economies. Many developing countries have realized that achieving decarbonization is difficult if measured against Western production costs. High-quality and affordable Chinese solar panels and other products represent one of the solutions to climate issues.
China plays a leading role in the field of green energy, contributing to global energy transformation. On January 14, Wang Jun, Vice Director of the General Administration of Customs, stated at a press conference held by the State Council Information Office that in the field of green energy, the exports of lithium batteries and wind turbines will increase by 26.2% and 48.7%, respectively, by 2025. In the field of green transportation, the exports of electric motorcycles and bicycles will grow by 18.1%, while those of railway electric locomotives will increase by 27.1%. In the field of green production, the exports of industrial gas purification equipment will increase by 17.3%, and those of electric forklifts will increase by 5.2%. High-quality green supply provides China with solutions for global green transformation.
