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‘Overcapacity’ claim masks anxiety over China’s green edge

2026-08-24 16:48   China Daily

  Chinese companies are increasingly competing in sectors with higher technological barriers and greater strategic importance. EVs, renewable energy equipment, batteries, industrial machinery and sophisticated electronics are becoming important parts of China's manufacturing and export base.

  This creates genuine pressure on established producers. But competition from increasingly efficient rivals is not in and of itself evidence of unfair trade.

  The lesson is not that governments should ignore unfair competition, but that restricting one competitor does not eliminate the economic forces reshaping an industry.

  A similar pattern could emerge in clean technology. Barriers against Chinese EVs, lithium batteries and solar products may alter trade flows, and they can also increase costs for consumers and manufacturers, encourage production to move through third countries and make supply chains more complicated without addressing the underlying competitiveness gap.

  The greater danger is that ordinary economic competition becomes increasingly treated as a national security issue. Once industrial capacity, exports and investment are routinely framed through the language of security, almost any competitive advantage can become grounds for tariffs, export controls, investment screening or exclusion from supply chains.

  The result could be higher energy and production costs, slower technological progress and innovation, and greater risks of retaliation and supply-chain decoupling. Such fragmentation would ultimately undermine the broader interests of the global economy.

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