by Ma Kangduo
A latest article in The Economist bluntly declared “China won’t apologize for overcapacity.” The subtitle is much more direct: “Its industrial policy rests on a simple principle: might makes right.”
The actual downside with this narrative shouldn’t be about capability pressures; it’s about turning financial competitors into an ethical judgment. When a rustic expands its manufacturing, lowers prices, and achieves effectivity throughout its provide chains, it’s nonetheless requested to “apologize” — as if success itself have been a sin.
MORE PRODUCTION THAN DEMAND IS NOT OVERCAPACITY
To ensure, China has substantial manufacturing capability and powerful exports in electrical automobiles, photovoltaic merchandise, batteries, and metal. But that doesn’t routinely quantity to “overcapacity.” Defining manufacturing capability that exceeds home demand as overcapacity is an excessively simplistic manner of understanding the idea.
By that logic, a lot of the plane manufactured by the United States, akin to Boeing airplanes, are exported as a result of the home market can not take in your complete output. German vehicles, Japanese machine instruments, South Korean chips, French luxurious items and Swiss watches — nearly all extremely specialised industries with comparative benefits — produce excess of their home markets devour. If all of those have been deemed “overcapacity,” then worldwide commerce and the worldwide division of labor themselves would develop into an issue, and the speculation of comparative benefit could be turned on its head.
A rustic specializing within the merchandise it may possibly produce most effectively after which buying and selling them for different items is exactly the muse of recent financial effectivity. To single out China’s benefits in sure sectors and easily label them “overcapacity” is, in essence, a selective double commonplace.
DOUBLE STANDARD IN INDUSTRIAL POLICY
China’s industrial coverage is portrayed as a “whole industry chain model” and cited as proof of “market distortion” and “overcapacity generation.” In distinction, the huge, focused, and exclusionary industrial subsidies of the United States and Europe are largely ignored, or handled as in the event that they weren’t even price mentioning.
The U.S. Inflation Reduction Act gives an estimated 369 billion {dollars} in clean-energy and climate-related incentives, together with tax credit for clear vitality and electrical automobiles, whereas incorporating domestic-content and North American sourcing necessities. The CHIPS and Science Act likewise gives substantial incentives to assist semiconductor manufacturing within the United States. The EU’s Clean Industrial Deal goes even additional, planning to mobilize greater than 100 billion euros (116 billion {dollars}) to assist EU-made clear manufacturing.
The underlying logic of those insurance policies is remarkably just like that of the Chinese industrial insurance policies they criticize: utilizing fiscal subsidies, tax incentives, and home content material necessities to actively form the commercial panorama. The solely distinction lies within the labeling. When China does it, it’s known as “market distortion,” “overcapacity,” and “might makes right.” When the United States and Europe do it, it’s known as “strategic autonomy,” “industrial security,” and “responding to the climate crisis.”
“I CAN HIT YOU, BUT IF YOU HIT ME BACK, THAT’S AGGRESSION”
This double commonplace turns into much more obvious within the narrative surrounding “actions” and “counteractions.”
When the United States raises tariffs and promotes manufacturing reshoring, or when Europe advances “Made in Europe,” the Clean Industrial Deal, or the Carbon Border Adjustment Mechanism, these measures are framed as “defending the remaining industrial base,” “safeguarding strategic autonomy,” or “responding to unfair competition.” The language is defensive, reliable, and even tinged with a way of victimhood.
Yet when China takes reciprocal countermeasures — whether or not tariffs, export controls, or equal restrictions — they’re instantly labelled “geopolitical weapons,” “economic coercion,” or “weaponizing interdependence.” At its core, that is the logic of “I am defending myself when I hit you, but you are committing aggression when you hit me back.”
The West is presumed to have a unilateral monopoly on defining what constitutes “legitimate industrial policy” and “illegal countermeasures.” They can use subsidies, domestic-content guidelines, and tariff boundaries to restructure provide chains, whereas China is anticipated merely to simply accept the result and chorus from responding in type. Once China does reply, financial competitors is instantly escalated right into a “threat to the international order.”
THE REAL EXCESS
A creating nation is requested to apologize for “being too successful,” whereas the West stays silent about its personal huge subsidies and topics equal responses by others to ethical judgment. This is an actual double commonplace. It reveals not financial rigor, however nervousness and conceitedness within the face of the erosion of its personal comparative benefits.
A genuinely honest debate ought to acknowledge that just about all main economies use industrial coverage. The actual query shouldn’t be whether or not industrial coverage exists, however whether or not it’s clear, whether or not it complies with the principles, and whether or not it creates unsustainable distortions. Singling out China for ethical condemnation whereas remaining silent about one’s personal huge subsidies and protectionist measures will solely strip the idea of “overcapacity” of its credibility and cut back it to nothing greater than a rhetorical weapon.
What the West’s “overcapacity of China” narrative actually reveals shouldn’t be financial actuality, however conceitedness and a obtrusive double commonplace.
What the West has in extra is conceitedness and double requirements — spinning competitiveness right into a sin, effectivity right into a risk, achievement right into a blunder to be repented, and reciprocal responses into aggression — it’s this narrative itself that must be scrutinized essentially the most.
Editor’s be aware: The writer is a researcher and commentator specializing in worldwide affairs.
The views expressed on this article are these of the writer and don’t essentially replicate the positions of Xinhua News Agency.