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China Pushes Back Against “Overcapacity” Claims in New Energy Industries

by Krystal

Amidst concerns voiced by some Western nations regarding alleged “overcapacity” in China’s burgeoning new energy sectors, Chinese Premier Li Qiang refuted these claims during his meeting with German Chancellor Olaf Scholz in Beijing on Tuesday. Premier Li emphasized that China’s advancement in new-energy industries stemmed from self-improvement and healthy market competition, rather than reliance on government subsidies.

Highlighting the principle of comparative advantage, Premier Li underscored the importance of cooperation among nations to achieve mutual development goals. He expressed confidence that China’s high-quality production capacity in the new energy industry would contribute significantly to global efforts toward green development.

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Contrary to assertions of overcapacity, data analyses of China’s emerging industries indicate a different reality. The National Information Center of China forecasted a steady rise in the penetration rate of new energy vehicles, projecting an increase from 35.2 percent in 2023 to 60 percent by 2033.

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Moreover, the International Energy Agency’s estimates suggest robust growth in global electric vehicle (EV) sales and solar photovoltaic additions by 2030. These projections align with China’s strategic focus on new energy technologies.

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Jin Xiandong, an official from China’s top economic planning agency, the National Development and Reform Commission, dismissed claims of overcapacity during a press conference. Jin argued that moderate surplus production is a common phenomenon globally and fosters market competition.

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Addressing attempts to link production capacity issues with international trade, Jin asserted that such allegations lack credibility. He cited a recent Bloomberg report indicating that China’s leading electric vehicle exporters maintain capacity utilization rates within internationally accepted norms.

French entrepreneur Arnaud Bertrand echoed these sentiments, emphasizing China’s competitiveness in the global market. Bertrand’s analysis, published on X, challenged the narrative of industrial overcapacity in China, attributing concerns to fears of competition rather than objective assessment.

Bertrand criticized the framing of China’s industrial capacity as malign, advocating for a more nuanced understanding of competitive dynamics in the global market. He urged leaders to confront challenges with pragmatism rather than resorting to scapegoating.

In essence, China’s rebuttal to allegations of overcapacity underscores its commitment to sustainable growth and cooperation in the new energy sector, while also challenging misperceptions regarding its industrial capabilities.

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