China responds to allegations of Western overcapacity in electric vehicles and lithium batteries, according to China News

DALIAN — Chinese Premier Li Qiang used his speech at a World Economic Forum meeting in Dalian to hit back at accusations from the United States and the EU that Chinese companies benefit from unfair subsidies and are willing to flood their markets with cheap green technologies.

His comments come as China and the European Union prepare to hold technical negotiations on the planned imposition of tariffs on Chinese-made electric vehicles (EVs) imported into the 27 bloc and after the United States United States has unveiled sharp increases in customs duties on a series of Chinese vehicles. imports, including EV batteries, in May.

“China’s production of advanced electric vehicles, lithium-ion batteries and photovoltaic products, etc., first ensures our domestic demand, but also enriches global supply,” Li said in his speech. opening June 25.

“The rapid rise of China’s new industries is rooted in our own unique comparative advantages.”

The United States and the European Union have both accused China of having overcapacity in green technology and announced measures to protect their respective domestic industries from what they see as unfair competition from the share of Chinese companies seeking to increase their exports in a context of weak domestic demand.

Brussels’ trade policy has become increasingly protective and aligned with Washington’s, amid concerns that China’s production-driven development model is being flooded with cheap goods as Chinese companies seek to expand exports amid weakness in domestic demand.

Beijing warned Brussels that it risks opening a new front in the trade war between the West and Beijing – which began with the first import tariffs imposed by Washington in 2018 – and opened an anti-dumping investigation into imports of EU pork following the EU tariff decision.

“The continued emergence of economies of scale can effectively dilute enterprises’ innovation costs… which is the real source of the strong competitiveness of China’s new industries,” Li said.

China maintains that it simply decided to invest in green technologies earlier and that the West’s actions are unjustified.

“China has really made progress in producing these low-cost cars… so it’s a lesson for us to try to get our act together and be better at this,” said Dr. Benoit Boulet , professor of electrical and computer engineering at McGill University. , on the edge of the summit.

“It was seen as a threat at the very beginning, but Chinese cars will eventually come to North America.”

China and Chinese analysts have consistently rejected accusations that it has an overcapacity problem or that its companies benefit from unfair subsidies, saying that as the US$18.6 trillion (US$25.15 trillion) economy grows of Singapore dollars) would recover, supply would better meet demand.

Li told delegates that “the rapid growth of new industries and new driving forces has strongly supported and supported the healthy development of China’s economy.”

“The situation should continue to improve steadily and we are confident in our ability to achieve the economic growth target of around 5% for the whole year,” he added.

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