（原标题：SFC Markets and Finance | Is China undergoing "overcapacity crisis"? Experts have their answers）
南方财经全媒体记者杨雨莱 施诗 李依农 广州、上海报道
Is China undergoing "overcapacity crisis"? Recently, U.S. politicians has been hyping the so-called "China's overcapacity," claiming that China has flooded the world with excessive new energy products and accusing China of using its supply chain advantage to undermine other countries' industries.
According to the data, China's clean technology products, such as EVs, solar panels and lithium-ion batteries, only comprise a small share of China's exports, roughly 4.5 percent last year, far lower than that of Germany, Japan and South Korea.
What is the motive behind such misleading hype? Is the competitive edge of Chinese products really due to "overcapacity"? What kind of impact will the recent western tariffs on Chinese products bring to China and the recovery of the global economy and trade?
Today, we are pleased to have Wang Haifeng, director of the international trade and investment under the Institute for International Economic Research of the Chinese Academy of Macroeconomic Research, and Li Dawei, Director of the Emerging Economies Research Office under the Institute of International Economic Research of the Chinese Academy of Macroeconomic Research with us to discuss these intense issues.
SFC Markets and Finance: How should we debunk the misconceptions of "China’s overcapacity"? The western media tries to equate China's export of new energy products with "overcapacity", will that work?
"Overcapacity" Hasn’t Appeared in New Energy Sector
Wang Haifeng: In general, overcapacity is an economic concept. It is a phenomenon of market economy. In fact, overcapacity took place in developed economies like the US and the UK. And this issue has been persistent. It changes as the economic cycle changes. So, overcapacity is also reflected as a phenomenon in economic periodicity. With a market economy, as long as there is supply and demand, there may be overcapacity or misallocation of capacity crisis. The overcapacity or misallocation of capacity crisis that we concern usually takes place in traditional areas.
So, we think in new energy sector and new economy, there is no overcapacity. In recent, China’s clean products that some politicians mentioned, such as solar power, new energy vehicles and lithium-ion batteries, are important solutions not only to global climate change, low-carbon economy and circular economy, but also to green transformation for both countries and the world.
In the past decade, Chinese companies established their own comparative advantages in technology and cost by technological achievement, their efforts, competition and learning from multinationals. That’s why they have a relatively large share of the export market in the global market. Such comparative advantages, especially the comparative advantage in cost, are creating effective demand. This greatly simulate global low-carbon economy and green transformation.
Equating Exports with Overcapacity is Absurd
Li Dawei: Equating exports with exporting excessive capacity is essentially against the most basic common sense in the field of economics, which is the theory of international division of labor. As early as a few hundred years ago, Adam Smith pointed out that with the deepening of globalization, different countries have their own comparative advantages in the production of different goods or services. Based on these comparative advantages, exporting products in which they have an advantage and importing products in which they are at a relative disadvantage can maximize each country's output and improve the welfare of all countries. This has become common knowledge in economics. From this logic, how can we view exports as exporting excessive capacity?
Therefore, in the context of rapid globalization, any country determines its industrial development based on the demands of the global market. Some companies focus more on the domestic market, while others focus more on the international market. Thus, proposing the concept of overcapacity based on the proportion of exports in total production or the scale of exports is absurd.
As for the question you just mentioned about why the West, particularly the U.S., hypes up this rhetoric, I believe that this is happening as the relevant new technological revolution is accelerating. Among these, new energy technologies, such as green technology, are expected to play a crucial role in the new round of technological and industrial transformation. They are also currently sunrise industries that all countries are accelerating. Objectively speaking, in some fields of this industry, our country has transformed from a follower to a competitor, and even a leader. It should be said that we have strong competitiveness.
So the Western countries, especially the U.S., have felt the emerging competitive advantage of our country in these new technology fields, posing a certain threat to their so-called technological and economic hegemony. That is why they attack and even smear our country's related industries.
Firstly, the categories of products on which the U.S. and Europe have imposed tariffs, and the types of products they target, are different. Thus, the impact on different industries varies. For new energy vehicles, our current export volume to the U.S. is very small. Therefore, even if the U.S. imposes a symbolically high tariff, such as a 100% tariff, this tariff level will not have much impact on our exports of new energy vehicles to the U.S. because there weren't many exports to the U.S. in the first place.
Europe has imposed varying tariffs on our exports of new energy vehicles, ranging from below 20% to as high as nearly 40%. Our exports of new energy vehicles to Europe do have some scale, so objectively speaking, in the short term, this will inevitably affect the expansion of Chinese automotive products in the European market. This short-term impact is objectively present.
Additionally, the U.S. has also imposed tariffs on some of our other export products, such as power batteries. Naturally, this might also have a certain negative impact on the exports of these products to the U.S. in the short term.
SFC Markets and Finance: Some foreign media tried to criticize the Chinese government's tax relief and subsidy policies for China's new energy vehicles, but it is understood that policy support and subsidies for emerging industries are common practices of governments around the world.
How does the intensity of China's industrial policy and subsidy compare with that of foreign countries? How do you view the effects of China's industrial policy and subsidy policy for new energy products?
The Competitiveness of Chinese Products Is Rooted in Market Economy
Wang Haifeng: China’s macroeconomic policy, industrial policy, since 2001, especially since 2008 financial crisis, The implementation of China’s industrial policy is in accordance with WTO rules.
Secondly, China’s industrial policy treats foreign enterprises, domestic enterprises and private enterprises equally. The industrial policy is an open-door policy, which every country implements. Such policy is conducive to market competition, is conducive to fostering new industries, like new energies and new economies. For instance, digital technology plays an important role in new energies and new economy. It’s a common practice globally.
The competitiveness of Chinese products is not rooted in official industrial policies, is rooted in the market competition based on the open economy. In China, the competition between foreign enterprises and the private companies is relatively full. In the past several years factor costs has rose significantly in contrast to other developing countries but the quality of factor cost has improved too. And in contrast to developed economies like the U.S. Europe and Japan, the long-term comparative advantage of factor costs remains.
The comparative advantages of factor costs, with the improvements of the comparative advantage make China’s new energies and new economies competitive. This trade friction or trade dispute or economic friction is more a part of interest groups in European and American countries worried about so-called the decline of their comparative advantages. It’s a protection of their domestic industry. Sometimes it’s not necessarily to protect its domestic industry. It may be more of a political or cognitive bias.
SFC Markets and Finance: Recently, the United States and the European Union successively announced tariffs on Chinese new energy products such as electric vehicles. How do you assess the impact of higher tariff barriers in the US and Europe on China's new energy exports?
Protectionist Approach is Counterproductive
Li Dawei: However, I must emphasize that China's new energy industry, firstly, primarily focuses on the domestic market. Secondly, even in the international market, we have a diversified market, expanding in the U.S., Europe, as well as the Middle East, ASEAN, Latin America, Africa, and other countries and regions. We have our market shares because our new energy industry relies on its core technology and competitiveness, winning the favor of global consumers and entrepreneurs. Therefore, it is well received in various countries around the world.
So whether it's the export of new energy vehicles to Europe or power batteries to the U.S., their proportions in our overall new energy industry are not significant, nor are their proportions in the total output value of the industry. Therefore, the short-term impact on our related industries is not significant.
In the medium to long term, I believe that the West, particularly the U.S., definitely aims to protect its own industrial development by doing this. However, as historical experience has repeatedly proven, relying on trade protectionism cannot truly enhance the competitiveness of their related industries. It is very likely to slow down the pace of their technological progress in global competition, increasing the risk of falling behind in technology.
Therefore, in the medium to long term, this protectionist approach is very likely to be counterproductive, further weakening the core competitiveness of the U.S. and Europe in fields such as new energy vehicles and power batteries. This offers no substantial benefit to the development of their related industries. As for Chinese enterprises, as long as we continue to grow and strengthen in the tide of globalization, continuously increase technological innovation, and continuously introduce products that meet the needs of consumers around the world, the development prospects of our enterprises will be very bright.
（市场有风险，投资需谨慎。本节目嘉宾意见仅代表本人观点。）
策划：于晓娜
监制：施诗
责任编辑：李依农
记者：杨雨莱 施诗 李依农
制作：李群 蔡于恬
摄影：李群
新媒体统筹：丁青云 曾婷芳 赖禧 黄达迅
海外运营监制: 黄燕淑
海外运营内容统筹: 黄子豪
海外运营编辑：庄欢 吴婉婕 龙李华 张伟韬
出品：南方财经全媒体集团
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