During the recent visit of the Chinese Communist Party leader to Europe, one of the focal points of international attention is China’s “overcapacity” and global dumping, which have been disrupting the international market. However, Xi Jinping denied these accusations. Experts believe that the massive subsidies given by the CCP regime to industries like electric vehicles are aimed at pursuing socialist scale economy, intending to dominate the international market and control the world.
On May 8, Ursula von der Leyen, President of the European Commission, stated in a speech in Berlin that the EU market is flooded with Chinese electric vehicles that have received substantial government subsidies, emphasizing the need to address this issue to protect their industries.
Two days earlier, during meetings with French President Emmanuel Macron and Ursula von der Leyen, Chinese Communist Party leader Xi Jinping claimed that from a comparative advantage and global demand perspective, China does not have an “overcapacity” issue.
Professor Xie Tian from the School of Business at the University of South Carolina told Dajiyuan that Xi’s denial contradicts the EU’s accusations. “China indeed has a severe overcapacity. Recently, the CCP government has been promoting the so-called ‘new quality productivity’, with electric cars being one of the three driving forces. China has over 280 various electric car companies with an annual production capacity of 27 to 25 million vehicles, while the Chinese market can only absorb 15 to 17 million vehicles, clearly indicating overcapacity.”
After the trilateral meeting, Ursula von der Leyen stated at a press conference that the CCP government’s subsidies to the electric vehicle and steel industries pose a severe threat to the European industry, potentially leading to “deindustrialization in Europe” and making it difficult for the world to absorb China’s surplus products.
According to data, in 2023, China’s production and sales of new energy vehicles were world-leading for the ninth consecutive year, with exports accounting for 38% of the European market.
Chinese electric vehicles are rapidly expanding in the European market, capitalizing on their price advantage through cheap dumping. The EU is conducting an investigation on this issue to determine whether tariffs should be imposed.
Since China’s accession to the World Trade Organization (WTO) until 2011, a large influx of Chinese-manufactured goods poured into the US, leading to the loss of at least 2 million jobs in the US manufacturing sector due to what was termed as the “China shock.”
Twenty years after joining the WTO, China’s global commodity exports have exceeded 14%, with the impact of “China shock 2.0” being more significant and widespread, causing more severe damage to the international market.
Janet Louise Yellen, the US Secretary of the Treasury, has mentioned that President Joe Biden will not allow history to repeat itself.