EU and US Accused of Protectionism in New Energy Dispute with China

EU and US politicians have accused China of overcapacity in new energy production, but a European scholar claims it's a geopolitical ploy to shift blame for their own policymaking failures. Cui Fan, a professor at the University of International Business and Economics, argues that the true motive behind the accusation is to curb the competitiveness of China's new energy industry and support their own industries through political intervention.

Why this matters: The dispute over China's new energy production has significant implications for theglobal effort to combat climate change, as it could disrupt partnerships and hinder progress towards a net-zero future. Furthermore, the accusations of overcapacity could set a dangerous precedent for protectionism in the renewable energy sector, ultimately harming consumers and the environment.

The accusation of "overcapacity" is seen as a double standard, as Western countries call for further opening of the Chinese market while introducing protectionist measures that discriminate against Chinese companies. In 2018, China removed shareholding limits for foreign investors in the new energy vehicle sector, leading to rapid development and fierce competition between foreign, private, and state-owned automakers.

China's new energy vehicle sector has become a crucial contributor to the world's green and low-carbon transition, driving down the cost of renewable energy and helping other countries obtain clean, reliable, and more affordable energy. Imposing tariffs on new energy vehicles from China could disrupt existing partnerships and ultimately harm the interests of multiple parties, including German automakers who have established close relationships with China's domesticindustrial chain.

"The motive behind the accusation is to curb the competitiveness of China's new energy industry and support their own industry through political intervention," said Cui Fan. Maximilian Butek, executive director and board member of the German Chamber of Commerce in China-East China, emphasized, "German economy is highly exports dependent and oriented. So we believe in open markets, and I think that our markets have to be open."

China has been vigorously developing its new energy sector to meet its dual carbon commitments and help fight the climate crisis. The country has become the world's largest market for new energy vehicles and a major supplier of wind and solar power equipment and power batteries. Chinese photovoltaic companies have offered high-quality and cost-competitive products through innovation, giving millions of people access to clean energy.

As the dispute over China's new energy production continues, experts warn that protectionist practices could undermine global efforts to tackle climate change. China's role as a key contributor to the world's green transition is seen as vital, and disrupting existing partnerships could slow progress towards a net-zero future. The accusations of overcapacity are viewed by some as a politically motivated attempt to contain China's emerging industries and support domestic players in the EU and US.

Key Takeaways

• EU and US politicians accuse China of overcapacity in new energy production.
• Accusations seen as geopolitical ploy to curb China's competitiveness.
• Dispute may disrupt global climate change efforts and hinder net-zero future.
• China's new energy sector drives down renewable energy costs and helps other countries.
• Protectionist practices could undermine global climate change efforts.