China Refutes US Accusation of Overcapacity Ahead of Blinken Trip

TMTPost -- Beijing refutes U.S. accusation of overcapacity, labeling as economic coercion and bullying, just ahead of U.S. Secretary of State Antony Blinken’s trip to China.

Credit：Xinhua News Agency

China will focus on five goals fo Secretary Blinken’s visit, including first, establishing the right perception; second, strengthening dialogue; third, effectively managing disagreements; fourth, promoting mutually beneficial cooperation; fifth, working together to fulfill responsibilities as major countries, the state news media outlet Xinhua News Agency cited a senior official from the Department of North American and Oceanian Affairs of the Foreign Ministry. As to handle disagreements, the official said China is determined to safeguard its sovereignty, security and development interests, and will make clear its solemn positions and demands on various issues, such as Taiwan, economy and trade, science and technology, and the South China Sea.

The new measures that the Biden administration rolled out to curtail China's economic trade and technology development in such forms as export control gravely undermine the interests of China, and are creating risks, rather than de-risking, the official said. The so-called "overcapacity" is another example of outright economic coercion and bullying, as its real intention is to kneecap China's industrial development and put the U.S. in a more advantageous position in market competition, the official noted, adding that such accusation is misleading narrative hyped up by the U.S. packaged in economic concepts.

The official said the growth of China's exports of electric vehicles, lithium batteries and photovoltaic products over the past few years resulted from international division of labor and market demand, and is conducive to green development around the world. Initiating a new round Section 301 investigation out of domestic political needs is piling one mistake on another since the previous 301 probe launched by the Trump administration against China and the tariffs levied as a result are ruled as in violation of the World Trade Organization (WTO) rules and are opposed by many WTO members, the official said. China firmly opposes the move of the U.S. to politicize economic, trade and tech issues, the official stressed. China will resolutely respond to the U.S. move to suppress China's technology sector as China has made it clear such move is to curb China’s high-quality development and deprive the Chinese people of their legitimate right to development, according to the official.

China always views and handles its relations with the United States in accordance with the three fundamental principles of mutual respect, peaceful coexistence and win-win cooperation, and regarding to China-U.S. relations this year, China will follow three overarching principles: peace must be valued, stability must be prioritized, and credibility must be upheld, the official said.

The remarks highlighted Blinken is set to face challenges regarding highly-debated economic and trade issues like overcapacity during his visit following U.S. Treasury Secretary Janet Yellen. Earlier this month, Yellen said she raised concern over industrial overcapacity in her six-day trip. “China is now simply too large for the rest of the world to absorb this enormous capacity,” Yellen said. “Actions taken by the PRC today can shift world prices. And when the global market is flooded by artificially cheap Chinese products, the viability of American and other foreign firms is put into question.” She said the concerns will not be resolved in short run, but exchanges will provide a dedicated structure for U.S. to raise our concerns about China’s imbalances and overcapacity, and U.S. intends to underscore the need for a shift in policy by China during talks with senior Chinese officials.

China provided a full and rational response to the issue of industrial capacity during the meetings and talks with Yellen, Chinese Vice Finance Minister Liao Min replied a question about the concern Yellen expressed in her visit. "The so-called 'overcapacity' is the manifestation of the market mechanism that plays its role. The balance between supply and demand is relative, while imbalance is often the norm," said Liao. The vice minister said the current production capacity of the new energy vehicle (NEV) sector is far from meeting the market demand, and Chinese companies, through their reduction of production costs and improvement of NEV affordability, have made positive contributions to the global response to climate change and green development.

According to the schedule released by the U.S. Department of State, Blinken will travel to China from April 24 to 26. The Secretary will meet with senior officials in Shanghai and Beijing to discuss a range of bilateral, regional, and global issues, including the crisis in the Middle East, Russia’s war against Ukraine, Taiwan Strait issues, and the South China Sea. The Secretary will also discuss ongoing work to fulfill the commitments made by Presidents Biden and Xi at the Woodside Summit last November on resuming counternarcotics cooperation, military-to-military communication, artificial intelligence, and strengthening people-to-people ties, and will reiterate the importance of the United States and the PRC responsibly managing competition, even in areas where our two countries disagree.