For some time, some western politicians and press have repeatedly hyped up the so-called Chinese "overcapacity", and extended such accusation from new energy to more sectors, claiming that China exports excess capacity and hits the global market. In fact, this argument is abusing the concept of "overcapacity" and goes against both the objective facts and rules of market economy.

Firstly, the so-called Chinese "overcapacity" argument is far from the fact of the green sector’s prospects. Overcapacity occurs when production capacity is higher than market demand and normal expectations. At present, green and low-carbon development is the prevailing trend, and the global demand for new energy products continues to grow. According to the research of International Energy Agency, to meet the carbon neutrality goal, global demand for new energy vehicles will reach approximately 45 million units in 2030, more than three times that of 2023, and the global demand for power batteries will reach 3,500 GWh in 2030, more than four times the global output in 2023, far exceeding current global supplies. Report of the United Nations Conference on Trade and Development shows that to realize global carbon neutrality, investment in the global new energy sector must be further accelerated. The above findings tell that current global capacity of the green sector is relatively insufficient and still requires significant improvement, which is far from being excessive.

Over the past years, China has accelerated the development of new quality productive forces, cultivated competitive advantages in new energy sector based on improved R&D and innovation, well-equipped industrial and supply chains, and a large-scale domestic market, and become a major force in the global green transition. People of insight from the EU side believes that the so-called "overcapacity" in China's green sector is an absurd argument, "in fact, the world needs China and other countries to further expand capacity exactly in green sectors such as solar panels, batteries and electric vehicles. We should encourage all countries to invest more in the above sectors."

Secondly, the argument that higher export means "overcapacity" is untenable. In the context of economic globalization, markets, production and consumption are global, thus supply and demand need to be matched and modulated with a global horizon. Countries participate in international division of labor and cooperation based on comparative advantages, form different industrial layouts and capacity scales of their own, and share the benefits of specialized division of labor by "buy globally and sell globally". It not only improves the efficiency of global resource allocation, but also enhances the well-being of people in various countries. If countries arrange capacity solely based on their domestic markets, international trade and reciprocity will be impossible, which is unimaginable in the real world.

In fact, developed countries such as the United States, European countries and Japan have all long exported large quantities of products to the rest of the world. About 80% of US-produced chips are for export. Nearly 80% and 50% of the cars produced in Germany and Japan respectively are exported. Airbus and Boeing aircrafts are also exported in great numbers. However, China’s NEV exports only accounts for 12.7% of its total output in 2023. If one sees the export of competitive products by developed countries as normal and reasonable, but accuses the export by China and other emerging countries as "overcapacity", it will be typical self-contradiction and double standard.

Thirdly, one should not implement protectionism in the pretext of opposition to “overcapacity”. Many economists and professionals in Europe and the US have pointed out that the so-called Chinese “overcapacity” is very baffling and puzzling, as such a conclusion cannot be arrived at either by analyzing market supply and demand or observing industry development reality. In fact, the so-called Chinese “overcapacity” is a fallacy not based on the logic of product supply and demand and market rules at all. With significant improvement of China’s position in global value chains, some western countries, in order to protect their vested market shares and dominant positions, totally disregard the principles of free trade and fair competition, and hype up the “Chinese economic threat” or Chinese “overcapacity” by all means. Such actions are only to find pretexts and excuses for adopting protectionist measures and launching trade disputes.

History and reality have proven many times that protectionism harms others without benefiting oneself and leads to no winners. Only by abandoning the zero-sum mindset of beggar-thy-neighbor as well as isolation and closure, and by jointly reducing barriers and expanding openness, can global trade and economic cooperation be revitalized. Therefore, it is advised that all countries give full play to their comparative advantages, strengthen policy coordination and standard harmonization, synergize technical innovation and results sharing, work together to maintain the stability and smoothness of global industrial and supply chains, jointly foster a more just and equitable international trade and market environment based on WTO rules, with a view to effectively enhancing economic efficiency and people’s well-being.