‘Overcapacity’ in China or fear of China’s rise?

Recently, U.S. politicians and media have sensationalized the concept of “overcapacity” in China, particularly focusing on the expansion of Chinese manufacturing in new sectors like electric vehicles (EVs), lithium-ion batteries, and solar panels. This narrative suggests that Western anxiety about their competitiveness in these industries is driving them to label China’s growing industries as overcapacity to hinder their progress.

What motivations underlie this theory of overcapacity? And why is China’s role crucial in these industries?
Here are the answers from Senator Mushahid Hussain Sayed, chairman of Pakistan’s Senate Defense Committee; Erik Solheim, former chief of the UN Environment Program and president of the Green Belt and Road Institute; Koh King Kee, president of the Center of New Inclusive Asia; Chen Xi, founder of Harbor Overseas; and Aqdas Afzal, associate professor of Economics at Habib University.

“There’s a lot of hype in certain countries, especially the U.S. and even certain Western countries about China’s so-called overcapacity,” said host Mushahid Hussain Sayed, chairman of Pakistan’s Senate Defense Committee, on CGTN’s show Global South Voices.
Aqdas Afzal, associate professor of Economics at Habib University, Karachi, pointed out that it is the fear of China’s rise and the yearning for votes in the election year that drives the spreading of “China overcapacity” hype in the U.S.. “I think that there is concern that certain Western nations have about China’s stellar and exponential, amazing economic growth and how to make sense of that. And I think the second reason is political because this is an election year … So I think we cannot really dissociate or decouple what is going on in terms of the policy utterances that are coming from the U.S. and domestic politics in the U.S.”

Out of geopolitical concerns, the U.S. uses multiple means to suppress China’s growth, the CHIPS and Science Act being one of them. Chen Xi, founder of Harbor Overseas, believes that the U.S. should join the market competition in China and use the Chinese supply chain to collaborate, to provide a better option to getting to a green economy and adapt to climate change globally rather than fabricating excuses to hinder China’s development.