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Protectionism will drive green transition to dead end: China Daily editorial | Updated: 2024-05-22 20:39
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US Treasury Secretary Janet Yellen attends an interview with Reuters Editor in Chief Alessandra Galloni in Washington, April 25, 2024. [Photo/Agencies]

The United States is trying to sell its false narrative on China's "overcapacity" to Europe in the hope of soliciting the European Union's support for Washington's protectionist moves aimed at suppressing the development of China's new energy enterprises.

US Treasury Secretary Janet Yellen, during her visit to Frankfurt, Germany, said on Tuesday that the US and Europe needed to respond to China's industrial overcapacity in a "strategic and united way" to keep manufacturers viable on both sides of the Atlantic. "It's more forceful to communicate to China as a group," she said.

She made the remarks after the Joe Biden administration announced plans to slap new tariffs on Chinese electric vehicles, advanced batteries, solar photovoltaic panels, steel, aluminum and medical equipment last week, with the tax rate on imported Chinese EVs expected to increase to 102.5 percent this year, up from a total of 27.5 percent, and those on solar panel imports to double to 50 percent.

Such naked protectionism, which tramples on the principles of the market economy and goes against international trade rules, has so far received a cold shoulder from EU countries, with Swedish Prime Minister Ulf Kristersson describing it as a "bad idea to start dismantling global trade".

German Chancellor Olaf Scholz said that European and even some North American manufacturers are "successful in the Chinese market, and we have to take that into account", while stressing the importance of trade between the West and China.

Instead of subsidies, the rapid growth of China's new energy industries is driven by continuous technological innovation as a result of fierce domestic competition, well-developed industry chains, and intense research and development. The so-called overcapacity is just a myth fabricated by the US to smear China's image as a leading driver of the global green transition.

In 2023, China sold 9.49 million of the 9.59 million EVs it produced, the majority in the domestic market, which reflects the dynamism of its EV industry. The claim that China is flooding overseas markets with its EVs is patently untrue, as the country exported only about 12 percent of the EV units it produced last year. In comparison, 50 percent of Japanese cars are sold overseas, and nearly 80 percent of Germany's auto output is shipped to foreign markets. In wielding the big stick of protectionism, the US will not only hurt the interests of Chinese new energy enterprises, but also increase the cost of living for US consumers. It will also cause increased damage to the security and stability of global industry and supply chains, and put a brake on the global green transition.

The world needs to urgently accelerate the green transition, not slow it down, and there is huge demand for China's new energy products. The US is only bringing misfortune on the world by impeding the global low-carbon transformation. It must act rationally and stop politicizing the trade issue and start working with China and Europe to facilitate the greening of lifestyles, rather than using sanctions and other protectionist measures to derail the process.

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