北京房价均降1万

‘Overcapacity’ claim groundless as China’s green tech fuels global growth: Tian Xuan_我的网站

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    Tian Xuan Photo: Courtesy of Tian
In economic theory, "overcapacity" - for which no universally accepted definition exists - is inherently a recurring feature of the market economy's dynamic "balance - imbalance - rebalance" cycle. The Western narrative that equates China's sizable production capacity directly with "overcapacity" defies economic logic and rigor; in reality, it represents a politicization of trade and economic issues.
First, it confuses the concepts of "capacity scale" and "overcapacity." China's overall industrial capacity utilization remains within a reasonable range. Periodically lower utilization in traditional sectors reflects a normal adjustment as these industries advance toward high-end, intelligent, and green production. Ample capacity in certain emerging industries is precisely what meets surging global demand for high-end, smart, and green solutions. Therefore, equating scale with excess is typical equivocation.
Second, "overcapacity" itself is a dynamic feature of market economies, where no fixed balance persists indefinitely. Judging capacity based solely on static snapshots violates basic economic principles.
Third, it is erroneous to simplistically link trade surpluses or industrial subsidies to overcapacity, while ignoring the macro context of global specialization and cross-border savings-investment structures. It also disregards the reality that reasonable capacity utilization ranges differ across economies at varying stages of development. Imposing a single standard on China is neither scientific nor rigorous.
China's global competitiveness in green technology stems from sustained, large-scale investment in innovation, a comprehensive industrial and supply chain system, massive application scenarios, and intense market competition - not from alleged government subsidies. After decades of long-cycle R&D, Chinese industries have achieved breakthroughs in core technologies such as power batteries and photovoltaic modules.
During the 14th Five-Year Plan period (2021-25), China's nationwide R&D spending grew at an average annual rate of 10 percent. Economies of scale have continuously diluted production costs. China's ultra-large domestic market and full-chain supporting ecosystem provide an optimal testing ground for new technologies - from pilot verification to mass deployment. With more than 200 million market entities driving fierce competition, enterprises are constantly compelled to cut costs, raise efficiency, and upgrade products, thereby forging dual advantages in price and performance that we see today.
There is no direct causation between subsidies and overcapacity. Industrial subsidies are a globally recognized practice, typically aimed at correcting market failures and advancing critical technologies. China's subsidies are granted on an impartial basis to all types of market entities, in full compliance with WTO rules, and have not triggered disorderly capacity expansion.
Currently, capacity utilization in China's green industries remains within a reasonable range. Support is primarily directed toward R&D, technological breakthroughs, and consumer-side incentives through market-based mechanisms - not toward fueling overcapacity. Crucially, China's high-quality capacity has reduced the global cost of green transition, representing an opportunity rather than a shock to world development.
Against the backdrop of global carbon neutrality goals, labeling China's new energy capacity as "overcapacity" is entirely untenable. According to the International Energy Agency, global data center electricity consumption will approach 1 trillion kWh by 2030, with 40 percent of incremental power needing to come from renewables. Demand for wind power, photovoltaics, power batteries, and related green energy solutions remains far from saturated - so claims of "overcapacity" are groundless.
China's capacity plays a central role in advancing the global energy transition. Over the past decade, the levelized cost of electricity from wind and solar globally has fallen by more than 60 percent and 80 percent respectively - improvements largely attributable to Chinese innovation and manufacturing, which have directly lowered the cost threshold for worldwide green transformation.
The US journal Science crowned the global renewable energy surge led by China among its Top 10 Breakthroughs of 2025. Leveraging its technological and scale advantages, China is well positioned to supply abundant, high-quality green energy equipment and solutions, meet fast-growing renewable demand from data centers, industrial production, and other sectors, and tangibly support countries in implementing the Paris Agreement. In short, China is a pivotal force driving the global low-carbon transition.
The so-called "China Shock 2.0" is fundamentally a protectionist narrative rooted in Cold War thinking - a politically motivated claim inconsistent with facts. The rapid development of China's modern industries is driven by innovation and sustained institutional reform, not by dumping allegedly excess capacity abroad. Rather than posing a shock, China's industrial progress offers a "China Opportunity 2.0." It delivers multiple dividends to global development - innovation dividends, market dividends, and growth dividends - while injecting stability and vitality into global industrial chains through an open and win-win approach.
China's high-quality green and high-tech exports have tangibly accelerated the global green transition and reduced production costs worldwide. Meanwhile, as the world's largest goods consumption market and the second-largest importer for 17 consecutive years, China provides enormous market opportunities for economies around the globe. Moreover, China's open-source collaboration and technology sharing in frontier fields such as artificial intelligence and the digital economy enable developing countries to bridge the digital divide at lower cost and share in the benefits of the technological revolution.
The facts demonstrate that China's emerging technologies and products represent a "China Opportunity 2.0" - driving global technological progress, accelerating the green transition, improving livelihoods across nations, and bolstering the industrialization of developing economies. This open and mutually beneficial cooperation stands as the true engine of global economic recovery and sustainable development. 
This article is compiled based on an interview with Tian Xuan, dean at the Guanghua School of Management and Boya Distinguished Professor of Finance of Peking University. [email protected]

。    TOKYO -- Japan's Prime Minister Fumio Kishida said Monday he is preparing to take bold economic measures, including an income tax cut for households hit by inflation and tax breaks for companies to promote investment, in what's seen as a move to lift his dwindling public support.In his speech to start a new Parliamentary session, Kishida said it was time to shift from an economy of low cost, low wages and cost-cutting to one backed by growth led by sustainable wage hikes and active investment.“I'm determined to take unprecedentedly bold measures,” Kishida said, pledging an intensive effort to achieve stronger supply capability in about three years. “I will put more emphasis on the economy than on anything else.”He said he is determined to help people ride out the impact of soaring prices for food, utilities and other costs that have exceeded their salary increases, by implementing income tax cuts. He also pledged to introduce corporate tax incentives to promote wage increases, investment and optimization. Previously, Kishida had been considered reluctant to cut taxes because his government must find the funds to double Japan's defense budget within five years as planned while also trying to counter the impact of Japan’s low birth rate and rapidly declining population.Kishida's pledge on tax breaks has been criticized by opposition leaders as a vote-buying attempt because the proposals surfaced just before two by-elections held on Sunday that were seen as a litmus test for potential snap elections. His Liberal Democratic Party secured a parliamentary seat representing Nagasaki in Sunday's vote but lost in a combined district in Kochi and Tokushima to a candidate backed by the main opposition Constitutional Democratic Party of Japan. “The results clearly show that many voters are dissatisfied by the government's delayed economic measures to tackle rising prices," said Jun Azumi, a senior CDPJ lawmaker. Kishida told reporters that he takes the results seriously and that he will tackle important policies one by one. “Now is the time for me to focus on that, and I'm not thinking about anything else,” Kishida said, denying that his tax cut proposal was related to elections.The tax cuts would be part of a new economic stimulus package he plans to announce by the end of the month. On the diplomatic front, Kishida in his speech reiterated the need to strengthen Japan’s military, given conflicts that are underway elsewhere, such as Russia’s invasion of Ukraine and the war between Israel and Gaza's militant Hamas rulers. Kishida also urged China to immediately lift its ban on Japanese seafood imports imposed in August when the tsunami-wrecked Fukushima Daiichi nuclear plant started releasing the treated radioactive wastewater into the sea. The government is working to find new markets for the Japanese fishing industry that are less reliant on China, Kishida said.。

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