Monrovia, Liberia – China has revealed that some individuals have alleged that the government has created overcapacity in electric vehicles and other new energy sources through the use of subsidies. China has flooded the market with its products at supposedly low rates in order to absorb the excess capacity, distorting market prices and damaging the economy of other nations. The Chinese government report that none of this could be further from the truth.
China’s ambassador to Liberia, Yin Chengwu, declared that there was no excess supply of new energy being produced in China.
According to economic theory, “overcapacity” occurs when an industry’s production capacity surpasses market demand, leading to an imbalance where demand outpaces supply as a result of the workings of the market mechanism.
Though by no means sufficient, the world’s new energy products are not a significant surplus. China’s new energy vehicle penetration rate in 2023 has reached 31.6%, whereas the United States’ penetration rate is currently only 9.3% and Europe’s has long been around 20%. The International Energy Agency estimates that the global demand for new energy cars in 2030 will be 45 million, or 4.5 times the 2022 demand, if all nations that have committed to “Net-Zero Emissions” do so on schedule. 820 gigawatts, or roughly four times, more solar installations will be needed globally in 2022 than there already are. The rate at which new energy capacity is being developed globally indicates that it is far from fulfilling the future market demand.
Chinese consumers’ desire for domestically produced new energy vehicles is only increasing. China will have 435 million automobiles by 2023, of which only 20.41 million and 15.52 million are pure electric and new energy vehicles, respectively. That is really a tiny portion. As a result, there isn’t an excess of new energy produced worldwide, and China isn’t likely to have too much of it either.
China produces renewable energy without the need for subsidies.
China was a pioneer in the new energy sector, with robust industrial support spanning all areas, including raw material supply, component production, machine assembly, and after-sale assistance. With 240 million college graduates and a population of over 1.4 billion, China provides an exceptionally large and excellent labor pool for the new energy sector.
China has exported more than one trillion yuan worth of photovoltaic equipment, lithium batteries, and new energy vehicles in recent years. As of 2023, China ranked first in the world for the manufacturing and sales of new energy vehicles for nine years running. Additionally, China exports more than half of the world’s lithium batteries, and its newly installed photovoltaic power generation capacity in 2023 is equal to the global capacity for 2022. Long-term investment in scientific research and proper market competitiveness generate such amazing industrial advantages. It cannot be produced by government subsidies; rather, it is the outcome of market demand and the global division of labor.
According to a release fro the Chinese embassy in Liberia, China isn’t upsetting global markets. China does not export its new energy products in substantial quantities; instead, they are mostly given to the domestic market. Only 12.7% of China’s export volume was made up of new energy cars in 2023, compared to 87.3% of domestic sales. With barely 1.1% of the European market, the three Chinese automakers at the center of the EU’s anti-subsidy probe. Furthermore, there is no so-called “low price dumping” because the average cost of Chinese electric vehicles in Europe is more than 31,000 euros, which is twice as much as the cost of such vehicles in China.
The Chinese report that malicious misinformation has been spread regarding China’s “overcapacity.” Certain nations use the term “overcapacity” incorrectly and apply a broad definition to “national security,” which effectively targets China’s beneficial industries and impedes China’s development. Some people view China’s smart cars and cranes as “spy weapons.” Industries such as steel, aluminum, ceramics, ships, and new energy all have “overcapacity.” In critical core and cutting-edge technologies like semiconductors, AI, supercomputing, and biomedicine, China has become a security danger to them.
”Promoting the green and low-carbon transformation of the global supply chain has become a global consensus. While some countries cannot ask China to shoulder emission reduction responsibilities that are incompatible with its developing country status, and are ‘selectively blind’ to the contribution of China’s new energy products to global emission reduction. This essentially disregards the rights of the vast number of developing countries to enjoy the fruits of green technological innovation and catch up with the trend of green transformation.”
Encouraging China-Liberia collaboration in new energy Keeping up with global climate change and ensuring energy security are two of the world’s biggest challenges today. Although Liberia has a strong reliance on fossil fuels for energy, the country has abundant solar energy resources and significant potential to grow a clean energy sector. China has pledged willingness to collaborate with Liberia in practical ways in relevant fields, to share China’s high-quality new energy production capacity with Liberia, and support the country’s photovoltaic industry in order to jointly address the challenges posed by climate change, support President Boakai’s ARREST agenda and the Sustainable Development Goals, and jointly address the challenges of global warming.
As said by President Xi Jinping, “We should pursue inclusiveness, shared benefits, and win-win outcomes.” China’s doors to the outside world will only get wider, and the new energy sector will continue to grow at its current rate. Additionally, we wish for every nation to make the right decision and avoid reentering the protectionism river.