China Stands Firm on Manufacturing, Advocates for Increased Global EV Demand

28 Sep, 2024

China Stands Firm on Manufacturing, Advocates for Increased Global EV Demand

China's manufacturing capacity plays a crucial role in addressing climate change and managing inflation, according to Vice Finance Minister Liao Min. His remarks were a direct response to US Treasury Secretary Janet Yellen's recent criticisms regarding China's industrial overcapacity. Liao emphasized that for decades, China has contributed to global disinflation by supplying high-quality, affordable manufactured products. He noted that as nations work towards achieving their carbon reduction targets by 2030, China's provision of green goods is becoming increasingly significant. The global demand for new energy vehicles is projected to reach between 45 million and 75 million units by 2030, far exceeding the current supply capacity.

In the context of riing trade barriers, Liao acknowledged concerns about overcapacity but emphasized the importance of candid communication regarding market economy rules. The challenges posed by tariffs from developed nations, including the EU and the US, have created tensions. Yellen's recent comments portrayed China's economic model as a potential threat to global businesses, while various countries expressed differing perspectives on China's role in international trade. Liao defended China's competitive edge in the renewable energy sector, attributing it not solely to government subsidies, but also to significant investments in research, technological innovation, and a focus on entrepreneurship.

He pointed out that the demand-supply imbalance is a natural occurrence in any market economy, driven by long-term investment decisions made by companies. Liao highlighted that historical investment trends in industries such as information technology and biopharmaceuticals have also led to periods of excess capacity in developed countries, underscoring the dynamic nature of global markets.