US warns China of predatory dumping to save economy

U.S. Treasury officials have threatened action if China floods global markets with low-cost products to shore up its stagnant industrial sector.

“The rest of the world will react, but they’re not reacting in a new anti-China way, they’re reacting to China’s policies,” said Jay Shambaugh, the department’s undersecretary for international affairs. ” he said. financial times In an interview.

The Purchasing Managers’ Index (PMI) released by the China Bureau of Statistics for January showed a slight improvement from the previous month, suggesting that demand in the manufacturing sector is weak despite increased production. was only for large companies.

The Chinese government spends more on industrial subsidies than any other major economy. A report released by the think tank Center for Strategic and International Studies puts the nominal figure in 2019 at a conservative $248 billion. It is estimated that the country spends more than twice as much as the United States to support its industry.

newsweek We have asked the Chinese Ministry of Foreign Affairs for comment in writing.

U.S. officials and executives are particularly concerned about China’s electric vehicles and solar panels. China accounts for more than 80% of the world’s solar panel manufacturing capacity and more than 60% of global EV sales in 2022.

China’s competitive advantage could threaten the viability of these industries in the U.S. The Inflation Control Act signed by President Joe Biden in 2022 will add more than $70 billion to the EV supply chain and solar power generation. More than $10 billion was spent on its production.

Earlier this month, Shambaugh led a delegation of five senior Treasury officials to Beijing to discuss a range of issues. These include not only potential areas for cooperation, such as climate change, but also the potential for increased Chinese manufacturing oversupply, which the U.S. government says could make a strategy of dumping low-cost products more attractive. It also includes subsidies from China, which is being considered.

“We believe that both China’s pro-industrial policies and its macro policy focus on supply rather than considering where demand comes from are moving us towards a situation where China’s overcapacity hits global markets. “I’m concerned about the situation,” Shambaugh said.

The United States is not alone in its concerns. Last fall, the European Union announced that it would launch an anti-subsidy investigation into the rapid increase in imports of Chinese-made EVs from Europe. European Commission President Ursula von der Leyen said the prices of these vehicles were “artificially kept low” by China’s “huge state subsidies”.

Asked about the EU investigation at a press conference on Tuesday, Chinese Foreign Ministry Spokesperson Mao Ning said: “The rapid development of China’s automobile industry has provided the world with cost-effective and high-quality products. With one in three exported cars being electric, they make a significant contribution to making the world greener and lower carbon.”