China Rejects Claims of Overcapacity in New Energy Sector, Calls for Fair Competition

The Chinese Foreign Ministry spokesperson Wang Wenbin refuted claims of 'overcapacity' in China's new energy sector on Tuesday, stating that the country's new energy capacity is necessary for green development and not a sign of excess. Wang's comments come in response to criticisms raised by some Western countries, particularly at the recent G7 Foreign Ministers' Meeting.

According to Wang, the rapid growth of China's new energy industry is driven by market factors and China's technological leadership, not government subsidies. He dismissed the 'overcapacity' rhetoric as a sign of protectionism, arguing that limiting the export of China's new energy products like electric vehicles would be harmful to all parties involved.

Data shows that China's electric vehicle export-to-production ratio is lower than that of other major car producing nations, indicating that Chinese companies are not dumping EVs on global markets. Wang emphasized that China's new energy exports, including electric vehicles, are priced according to market laws and not being sold at artificially low prices.

Why this matters: As countries around the world aim to achieve carbon neutrality goals, the demand for new energy vehicles and renewable energy infrastructure is expected to soar. Estimates from the International Energy Agency suggest that global demand for new energy vehicles and photovoltaic installations will quadruple by 2030, necessitating a significant increase in production capacity. China's leadership in the new energy sector positions it to play a vital role in meeting this growing demand and accelerating the global energy transition.

The Chinese Foreign Ministry spokesperson reiterated China's commitment to opening up its economy and called for fair competition and cooperation in the new energy sector. Wang urged relevant countries to provide a fair, transparent, and non-discriminatory environment for Chinese businesses operating in their markets.

China's exports of new energy vehicles, photovoltaic products, and lithium batteries surpassed 1 trillion yuan ($143 billion) in 2023, growing nearly 30% from the previous year. Experts argue that labeling this growth as overcapacity goes against the principles of economic globalization and fair competition. They point out that moderate oversupply can promote innovation and cost reduction, ultimately benefiting consumers worldwide.

In his concluding remarks, Wang Wenbin stated, "China stands by its policy of opening up and hopes that relevant countries will provide a fair, transparent, and non-discriminatory environment for Chinese businesses." He emphasized that China's new energy sector capacity is advanced and necessary for green development, not a sign of overcapacity.

Key Takeaways

• China refutes 'overcapacity' claims in its new energy sector, citing market factors and tech leadership.
• China's EV exports are not being dumped, with export-to-production ratio lower than other major producers.
• Global demand for new energy vehicles and renewables is expected to quadruple by 2030, necessitating capacity increase.
• China's new energy exports surpassed $143B in 2023, with experts arguing moderate oversupply benefits innovation and consumers.
• China calls for fair, transparent, and non-discriminatory environment for its businesses in the new energy sector.