Washington's "overcapacity" charges misleading

A top priority of US Treasury Secretary Janet Yellen during her just-concluded second China trip was to raise Washington's concerns to Beijing over the so-called "overcapacity" in China's flourishing green industries.

Prior to her visit, "Chinese overproduction" accusations coming out of Washington have flooded mainstream Western media, claiming that China could overwhelm world markets with cheap exports of solar panels and electric vehicles (EVs).

Washington's concerns are as unfounded as they are misleading. They are also a reflection of the zero-sum mindset of some policymakers in Washington.

In recent years, Washington has grown increasingly agitated over China's high-tech advancement, fearing the possible loss of its global technological supremacy. It has adopted a "small yard, high fence" strategy, slapped semiconductor sanctions against China, and blacklisted a number of Chinese tech firms under the pretext of national security.

The "overcapacity" charges also reveal Washington's double standard on practicing the principles advocating market economy, free trade and the global division of labor, which the United States has claimed to embrace for centuries: Whenever US industries are in an advantageous position, Washington champions the omnipotence of the market and free global trade; but when American companies face serious competition, the United States looks the other way, and puts up a protectionist shield.

David Fickling, a Bloomberg Opinion columnist, said in a recent opinion piece that "Yellen junks 200 years of economics to block China clean tech" and that the attempt is a protectionist disaster that will impede the path to net zero.

Instead of criticizing the fast development of green industries in China, the United States should shift its focus to strengthening its own. Bloomberg has noted that the crux of the issue for advanced economies, including the United States, lies in the efficiency and competitiveness of Chinese electric carmakers, including their technological prowess and modern transport infrastructure.

In fact, contrary to an "overcapacity problem," the clean energy sector is struggling to meet global demand amidst urgent climate change concerns and widespread efforts towards energy transition.

At the end of 2023, the International Renewable Energy Agency projected that in order to keep the Paris targets alive, global renewable power capacity must grow by around 1,000 GW a year through 2030.

In 2023, a year with a record high capacity addition, the world had an increase of around 507 GW, half of what was needed to keep the 1.5-degree target within reach, according to the International Energy Agency's Renewables 2023 report.

One of the most prominent obstacles to the global energy transition, the report said, is insufficient financing in developing countries, where capital can be two to three times higher than in mature renewable energy markets. Behind the investment gap lies the Western-dominated financial order, which puts monetary gains over developmental rights.

Instead of fanning Sinophobia to slow China's growth, Washington would be better served by sharpening its own technological strength and clean energy infrastructure. This also needs a commitment to defending free market ideals, which the United States claims to support.

China and the United States have more, not fewer, common interests. It is China's stance that the two sides should help rather than hinder each other's development, both in traditional areas such as trade and agriculture, and in emerging areas such as climate change and artificial intelligence.

Before departing for Washington following her China visit, Yellen repeated Washington's pledge not to seek decoupling from China. Simply rejecting "decoupling" verbally is not enough to create a healthy economic relationship between the world's top two economies. Only win-win cooperation in deeds can.