Chinese overcapacity claims by US, Europe are 'trade protectionism', ministry says

[May 16, 2024]  BEIJING (Reuters) - China said on Thursday that U.S. and European assertions of excess capacity were "naked trade protectionism" and that efforts to constrain new energy exports from the World's No.2 economy would frustrate global efforts to tackle climate change.  

Employees work on a production line manufacturing mechanical parts, amid the coronavirus disease (COVID-19), at a factory of SMC Corporation, during an organised media tour, in Beijing, China January 10, 2023. REUTERS/Tingshu Wang/File Photo

Growing alarm over Chinese industrial overcapacity flooding the European Union with cheap products is opening a new front in the West's trade war with Beijing, which kicked off with Washington's import tariffs in 2018.

"A country cannot be labelled as having excess capacity just because it has more capacity than it needs," He Yadong, a Commerce Ministry spokesperson said.

"Production and consumption are global, and supply and demand need to match and be adjusted according to a global perspective."

On Tuesday, the Biden administration unveiled steep tariff increases on $18 billion of exports, including a quadrupling of tariffs on Chinese new energy vehicles.

"Demand for new energy products will continue to expand in this global green transformation," He said, comparing China's dominance in green technologies to Boeing and Airbus' duopoly in the global aviation market. He asserted that global NEV sales needed to increase if the international community is to achieve carbon neutrality by 2030.

"The countries concerned are worried about their competitiveness and market share," He added.

"Overcapacity is not a product, it is an anxiety."

(Reporting by Joe Cash and Qiaoyi Li; Editing by Bernadette Baum)

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