BALANCED GROWTH
On Saturday, in Guangzhou, the southern export hub, Yellen and her main economic counterpart, Vice Premier He Lifeng, agreed to launch a dialogue focused on “balanced growth.” Yellen said she intends to use the forum to advocate for a level playing field with China to protect US workers and businesses.
“As the world’s two largest economies, we have a duty to our own countries and to the world to responsibly manage our complex relationship and to cooperate and show leadership on addressing pressing global challenges,” Yellen told Li.
The Economist Intelligence Unit forecasts China’s battery manufacturing capacity will outpace demand by a factor of four by 2027, as its EV industry continues to grow.
Beijing’s support for battery-powered rides has helped homegrown champions like BYD and Geely grab share in the world’s biggest car market, and turn China into the world’s largest auto exporter.
But rapid growth has also meant China has created excess manufacturing capacity that could be between 5 and 10 million EVs per year, according to consultancy Automobility.
Still, far from curbing investment in manufacturing, China has doubled down on Xi’s new mantra of unleashing “new productive forces”, by investing in cutting-edge technology, including EVs, commercial spaceflight and life sciences – areas where many US firms hold advantages.
Throughout her visit, Chinese state media have pushed back against Yellen’s message on excess capacity.
State news agency Xinhua said on Saturday that talking up “Chinese overcapacity” in the clean energy sector created a pretext for protectionist policies to shield American companies.
Suppressing China’s EV-related industries will not help the US grow its own, Xinhua said, expressing hope that more headway could be made during Yellen’s visit to break down barriers hindering mutually beneficial cooperation.
Source: CNA
