China’s green-tech manufacturing powerhouse
By Beiyi SEOW
Guangzhou (AFP) April 5, 2024
China has prolonged its manufacturing domination to wash vitality industries in recent times, alongside a world push for local weather change motion, however that’s beginning to fear america, Europe and others.
Washington is particularly involved about “overcapacity”, the place Chinese language subsidies to industries comparable to photo voltaic, electrical autos and batteries threaten to undercut these sectors in different international locations.
US Treasury Secretary Janet Yellen has vowed to lift the problem in her talks with key Chinese language officers this week.
Here’s a take a look at China’s energy in these inexperienced tech sectors:
– Photo voltaic dominance –
China is the world’s greatest emitter of the greenhouse gases driving local weather change, comparable to carbon dioxide.
Additionally it is pouring billions into inexperienced vitality and is ready to dominate the world’s photo voltaic provide chain, in keeping with Wooden Mackenzie.
A report by the analytics agency famous that China put greater than $130 billion into the photo voltaic trade in 2023.
With these investments, “China will maintain greater than 80 p.c of the world’s polysilicon, wafer, cell, and module manufacturing capability from 2023 to 2026”, Wooden Mackenzie added, referring to supplies key to the manufacturing of photo voltaic panels.
That is worrying for Washington, as america tries to construct up its manufacturing capability to scale back dependence on China and help its personal inexperienced transition.
On Wednesday, Yellen advised reporters that past tax subsidies for inexperienced industries, Washington wouldn’t rule out different technique of defending these sectors, comparable to commerce obstacles.
– Electrical autos –
China’s auto exports rocketed 57.9 p.c on-year to a report of 4.9 million items in 2023.
This was pushed by a 77.6 p.c leap in new vitality autos (NEVs) — together with all-electric and plug-in hybrids — to greater than 1.2 million items, state media reported, citing knowledge from the China Affiliation of Vehicle Producers (CAAM).
In 2023, state media famous, China made up greater than 60 p.c of worldwide NEV gross sales.
Final 12 months, the manufacturing of such autos rose round 36 p.c as effectively to exceed 9.6 million items, state media mentioned.
– Battery increase –
China’s lithium-ion battery sector additionally grew in 2023, with state media reviews saying complete output surged 25 p.c on-year.
Exports of such batteries, in the meantime, had been up 33 p.c on-year in 2023, reviews added.
In keeping with the Economist Intelligence Unit, China accounted for some 57 p.c of worldwide demand for lithium-ion batteries in 2022.
However there are warnings that the trade is grappling with extra manufacturing capability.
– ‘Excessive mismatch’ –
The fear in Washington and Brussels is that Chinese language inexperienced tech corporations with subsidy-fuelled manufacturing muscle and large inventories can provide costs so low that US and European corporations wouldn’t be capable of compete within the absence of commerce obstacles.
The “immense overcapacities in Chinese language industries is not only an financial problem for open economies, however runs the hazard of scary protectionist forces” amongst different international locations, mentioned Joerg Wuttke, president emeritus of the European Union Chamber of Commerce in China.
Yellen’s go to to China this week is essential on the subject of conveying this message to Chinese language leaders, he advised AFP.
China’s manufacturing value-add — the online output of the sector — stands round 30 p.c, considerably above america and different developed international locations.
However China, the world’s second-biggest financial system, solely makes up 14 p.c of worldwide consumption, Wuttke added, calling this an “excessive mismatch”.
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