China's Green Energy Dominance Sparks Concerns in US and Europe

Threat from China – Western officials are increasingly alarmed by China's rising exports of clean energy products such as solar power, electric vehicles, and lithium-ion batteries. The U.S. has prohibited EV battery materials from China, which has been labeled a "foreign entity of concern," and initiated an inquiry into Chinese-made "connected vehicles" or smart cars.

China's Green Energy Dominance

U.S. Treasury Secretary Janet Yellen, speaking on CNBC, mentioned that she wouldn't dismiss any actions, including tariffs, if China doesn't alter its approach to industry incentives. 

China's Green Energy Dominance Sparks Concerns in US and Europe
China's Green Energy Dominance Sparks Concerns

However, she emphasized a focus on China reducing local government subsidies and adjusting its macroeconomic policies.

Yellen stated, "I wouldn't dismiss any options at this stage. We need to consider all possibilities. We aim to collaborate with China to seek a resolution." Janet Yellen is concluding her second visit to China in nine months to engage with state officials.

"China's sheer scale now poses a challenge for the global market to absorb its significant capacity," Yellen remarked to reporters. "Actions taken by the People's Republic of China can influence global prices. When the market is inundated with artificially low-priced Chinese products, the sustainability of American and other foreign companies is jeopardized."

She also affirmed that President Joe Biden is committed to preventing a recurrence of the "China shock" experienced in the early 2000s, when a surge in Chinese imports led to the loss of 2.4 million U.S. manufacturing jobs.

China's sheer scale now poses a challenge for the global market to absorb its significant capacity.

China is increasingly expanding its influence and power in the green energy sector, causing concerns among U.S. and European officials about the potential inundation of subsidized exports from China.

Meanwhile, the European Union has initiated an inquiry into China's subsidies for local EV manufacturers, which involves substantial government investments to support domestic brands.

As Chinese car manufacturers aggressively expand overseas, Chinese car exports have surged, leading China to surpass Japan as the world's top car exporter in 2023. Approximately 60% of global EV sales originate from China's car industry, according to the International Energy Agency.

During a meeting with Yellen, Chinese Premier Li Qiang urged the U.S. to avoid "politicizing" economic and trade matters and encouraged a market-driven and globally oriented approach to address capacity issues.


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