DRIV - Thinking Hard About The China Overproduction Narrative
2024-05-30 08:10:00 ET
Summary
- Concerns about “overcapacity” arise primarily for goods linked to high-wage jobs, not for low-wage industries like clothing or toys.
- China sees its success as a result of a system that blends state coordination with market forces.
- The debate over China’s industrial overcapacity should be reframed through an economic lens that prioritizes economic efficiency and global benefit.
Watch almost any financial news network recently, and you almost can’t help yourself assimilating a major new narrative: China’s industrial overcapacity has become a major global economic issue, particularly in the transition towards renewable energy and electric transportation. U.S. Treasury Secretary Janet Yellen warns against China flooding markets with cheap exports, President Joe Biden has slapped huge tariffs on Chinese electric cars and solar panels, and European Commission President Ursula von der Leyen worries about China’s protected industries harming the EU’s industrial base....
Thinking Hard About The China Overproduction Narrative