China's Excess Capacity Raising Global Concerns

Yan Junqi
1 min read

In both Washington and Brussels, there's a consensus emerging about China's increasing overcapacity causing potential harm to overseas industries. The current situation has led to discussions on implementing protectionist measures to mitigate the damage. US Treasury Secretary Janet Yellen, ahead of her visit to China, expressed concerns about how China's overcapacity is distorting global prices and production patterns, with a focus on solar panels, electric vehicles, and batteries. This sentiment reflects similar worries in Europe, where EU Commission chief Ursula von der Leyen cited overcapacity as a key reason for launching an anti-subsidy investigation into Chinese electric vehicles. The heightened attention on China's overcapacity, particularly in solar panels and batteries, underscores the growing international apprehension and the possibility of protective actions to address the issue.

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