'Excess capacity' allegations false panacea: China Daily editorial

Nearly five decades after the launch of reform and opening-up, China has secured its place in the global market and supply chains. The country has not only embraced the opportunities of globalization, but also emerged stronger from the challenges of international competition, becoming an important contributor to the global economy.

But competition, one of the defining features of globalization, has faced higher barriers from some countries that were once among the most ardent champions of the process which connects economies around the world. Some economies, for specific purposes such as geopolitics and trade protection, have concocted various new standards to define so-called "excess capacity", simply, mechanically or generally, in an attempt to contain China's development and set obstacles to normal international economic and trade cooperation. These so-called "conceptual" standards are neither consistent with the laws of development, nor can they be detached from the realities of countries or how the global economy has evolved, as pointed out by the Chinese Ministry of Commerce in a document released earlier this week.

It's neither well-founded nor fair to attribute China's exports to "excess capacity".

Responding to some Western countries equating China's trade surplus in goods with "excess capacity", the position paper provides a wealth of examples to prove that this argument is untenable. It says the country's export growth stems not only from the improvement of its economies of scale and innovation capabilities, but also from the demand driven by other countries pursuing their green transition and industrial development, as shown by the popularity of Chinese products such as new energy vehicles and solar panels.

Over the past decade, for instance, the average cost of electricity from wind and solar power worldwide has fallen by more than 60 percent and 80 percent respectively, in large part thanks to Chinese manufacturing capacity — a dividend that has made a great contribution to the global energy transition.

Artificial intelligence models developed by Chinese companies are also rapidly gaining ground in overseas markets because they deliver strong performance on a cheaper basis, thanks to both the country's unwavering pursuit of innovation and its solid energy infrastructure.

Some Western countries blame China's development for their own problems such as slowing economic growth and lagging industrial transformation. Yet the data show China is providing more market, development and innovation dividends to the world through the utilization of its market advantages, industrial development and sci-tech progress. Instead of "China Shock 2.0", the reality is "China Opportunity 2.0".

Take for example the rise of China's electric vehicle industry. Not only are international companies collaborating with Chinese enterprises to develop their own products, but Chinese EV makers are also cooperating with their counterparts in Europe and other parts of the world by investing in local factories, reviving production lines, improving the supply chain and creating jobs.

Attempts to stifle competition under the pretext of "excess capacity" won't stop weaker industries lagging further behind.

Experience gained over the past decades of globalization demonstrates that openness unlocks shared opportunities, and an international trade and investment system that runs smoothly is in line with the interests of all countries.

A robust manufacturing foundation and rapid technological advances constitute key benefits China has reaped from globalization and passed on. Its contribution to the world economy should be fairly recognized, not stigmatized.