China’s energy and electric vehicle sectors transform global trade

Former trade official says there is no link to allegations of excess capacity.

A former senior economic official praised China’s new energy sector for its “transformative” effect on world trade and the environment, while rejecting accusations of eliminating excess capacity.

Jiang Yaoping, who was China’s vice minister of commerce from 2008 to 2013, said the country’s growing manufacturing weight has shifted the center of global trade, not only changing its traditional patterns but also significantly increasing the status of emerging markets and of developing economies.

“Remarkably, China has become the world’s largest automobile exporter,” Jiang said at the 10th annual forum of the Center for China and Globalization (CCG) think tank in Beijing on Saturday.

“The development of new energy vehicles in China is in no way positioned as a solution to ‘domestic overcapacity,’” he said, arguing that China’s electric vehicle (EV) industry represents the future direction of the global automotive sector. and is an important contributor to global environmental objectives and human well-being.

“China’s manufacturing is moving towards high-quality, intelligent and green development, and is upgrading the industrial chain, supply chain and value chain. This will have a profound impact on upgrading global trade structures and transforming the global trade landscape,” Jiang told ambassadors and economists from around the world gathered at the forum to discuss the decline of globalization.

Allegations of overcapacity have become a contentious issue in the growing economic rivalry between China and the United States and Europe.

The European Union says generous subsidies to China’s high-tech and green industries have created an oversupply of goods that are then exported at a lower cost, threatening the EU’s domestic market and undermining fair trade and competition.

The EU launched an investigation last year into Chinese electric vehicle subsidies, the results of which are imminent and are expected to impose extra import tariffs of around 20% on all Chinese-made electric vehicles.

Earlier this month, Washington announced it would substantially increase tariffs on a wide range of Chinese products, including electric vehicles, solar panels and lithium-ion batteries, also citing unfair trade practices and state subsidies.

Academics and officials at the forum in Beijing warned about several factors that are slowing globalization, while calling for increased cooperation between nations.

Jiang said improving the global trade scenario would require countries to coordinate policies, optimize trade structures, promote digitalization and green development of trade, formulate multilateral trade rules, cultivate talents and strengthen cultural exchanges.

According to Wang Liyong, director of the government-affiliated China Center for Contemporary World Studies, counter-globalization has become the main development trend and is likely to remain so for a long time.

“First, there is a growing polarization in politics around globalization, with some people advocating protectionism and isolationism. And more damaging is the emergence of a mentality that views international relations as a zero-sum game, where one country’s gain is another’s loss,” Wang said at the forum.

“This mentality can lead to the demonization of other countries, perceiving them as threats or enemies. The current consequences of international relations are likely to be the creation of nationalist sentiments, propaganda conflicts and even wars.”

Wang’s views were echoed by Declan Kelleher, chairman of the governing board of the European Policy Centre, a Brussels think tank, and former Irish ambassador to China and the EU.

“2024 is a year of changes and a year of crossroads [para a UE em meio a] turbulent geopolitical waters,” Kelleher said, referring to the war in Ukraine and the US presidential election in November, which could have serious implications for the bloc.

Former US President Donald Trump’s administration “seriously obstructed” the World Trade Organization “from fulfilling its role”, he said.

“I think this is something that should be analyzed, we really need to strengthen the WTO. The WTO has many defects, but it is still the basis of international trade law.”

Regarding the war in Ukraine, there is discomfort in Europe about China’s position, particularly in not publicly condemning Russia’s invasion of the former Soviet republic, despite pressure from the West and the United Nations.

Europe has also long been criticized by Beijing for following the US in its strategy to contain China. Speaking about strategic autonomy, which the EU has emphasized in its actions to “reduce risks” in relations with China, Kelleher clarified that this does not mean opposing or supporting the autonomy of any particular country. “This simply means that EU decisions must be taken by the EU, not automatically following any other country.”

Ferdinando Nelli Feroci, Italy’s former permanent representative to the EU, said the bloc faces many challenges in maintaining globalization, including the war in Ukraine and its impact on international relations.

“We were also forced to adopt a series of measures that went exactly in the opposite direction to globalization,” he said.

“We were forced to impose sanctions on Russia, we were forced to drastically reduce the purchase of fossil fuels from Russia, we were forced to diversify our sources of fossil energy supply, and we would have expected better solidarity from the rest of the world in dealing with this conflict.”

Nelli Feroci also emphasized the need for a more credible and effective system of international relations to address challenges including war, climate change, and global health and food security.

David Blair, former chairman of the economics department at the Eisenhower School of the National Defense University in Washington, said the world is at an inflection point, where a new type of relationship between great powers is being established and the old system, characterized by US-led globalization is no longer viable.

Blair, who is vice-president and senior economist at the CCG, also emphasized the importance of people-to-people relationships.

“The best way I see moving forward is for us to have as much contact between people as possible. So at least there will be that level of understanding. And maybe we can build on that to try to create a more peaceful, sustainable and globalized world,” he said.

Danny Quah, dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore, suggested that “third nations” — or the Global South — could play a crucial role in facilitating cooperation between great powers, avoiding orientalist approaches that reinforce imbalances. of power.

He argued that nations must cooperate multilaterally to resolve these issues, avoiding zero-sum confrontations, because “the world, as a consequence of these dynamics, has moved away from productive globalization to a world where there is securitization and militarization of the economy.”

Por South China Morning Post.