The term “overcapacity” is on the lips of nearly every prominent US lawmaker opining on relations with China, with officials accusing Beijing of a nefarious effort to bend the rules of the global economy to its benefit. But the accusation is nothing more than a smokescreen for Western countries’ weakness as they manufacture consent for punitive protectionist measures, argues the Global Times Chinese media outlet.
“‘Overcapacity’ hype reflects G7’s anxiety, lack of confidence,” reads the headline of an editorial published by the newspaper on Friday.
“Group of Seven (G7) leaders held a final day of talks at their annual summit on Friday in the southern Italian region of Puglia, with discussion of China's 'overcapacity' reportedly topping the agenda,” the outnet noted. “Chinese experts said this reflected G7 countries' anxiety and fear over their weakness in the international competition across new industries, and they are attempting to label China's advantageous industries as having ‘overcapacity’ to curb the country's development.”
A previously obscure term usually applied at the sub-macroeconomic level, “overcapacity” claims have been used by Western commentators to accuse China of unfair trade practices as the country solidifies its dominance in the manufacturing of electric vehicles. With shrewd state planning and fully domestic industrial and supply chains, Beijing has become the world leader in a number of green technologies, increasingly seeking to export its products abroad.
The development has caused consternation for Western governments, whose domestic industries are unable to compete with superior Chinese products.
In response, US and European lawmakers have turned to steep tariffs in an effort to attempt to slow Beijing’s rise. Tech magnate Elon Musk warned earlier this year that Chinese automakers would “demolish” Tesla and other Western automakers without trade barriers in a striking divergence from the free trade rhetoric traditionally favored by US business leaders.
The allegation has more broadly served as a useful Sinophobic talking point as the Western countries seek to stem the growth of the counter-hegemonic BRICS economic bloc, with Russia and China posing a major threat to global US dominance. The punitive measures against China’s green technology demonstrate that waging a Cold War against Moscow and Beijing is a higher priority than effectively addressing climate change, the Global Times argued.
“China has multiple countermeasures, but how China responds will depend on what would be the most beneficial option for us,” claimed an expert cited by the newspaper. “According to industry insiders, China is internally moving ahead with the procedure to raise the temporary tariff rate on imported cars with large-displacement engines.”
“The insider said that such a move would be not only in line with WTO rules, but also in line with China's broader efforts to promote the green transition in the auto industry and pursue the goal of reducing carbon emissions.”
“The US' vehement call for [the] G7 to act in coordination against China's trade policies shows that Washington's foreign policy of decoupling from and cracking down on China is fundamentally unchanged,” said another expert.
US President Joe Biden has kept in place former President Trump’s tariffs against Beijing, doubling down on the policy of his nationalist predecessor in keeping with former President Obama’s “pivot to Asia” policy of seeking to contain China.
But G7 leaders are increasingly weak and divided, the outlet noted, with German Chancellor Olaf Scholz and French President Emmanuel Macron recently facing electoral setbacks. Leaders throughout the Western world are facing historically low approval ratings, with the public turning against governments’ obsessive focus on backing Ukraine’s proxy war against Russia.