The US and EU are taking a big risk with China on the green industry. Le Monde report
China continues to produce and export energy transition technologies at rock-bottom prices. Despite the announcements, the West is still dependent on Beijing. The Le Monde article
Faced with the risk of climate change and rising sea levels, countries must adapt and build dams on all sides to prevent flooding. The same goes for the industrial tsunami coming from China. The first waves of Chinese electric cars in European ports are just the first ripples. With the persistent weakness of China's economy, the country's manufacturing, particularly in energy transition technologies , is pouring into the export market.
THE IMPACT ON EUROPEAN CAR MANUFACTURERS
The car manufacturers and equipment suppliers of the Old Continent are paying the consequences and starting to tighten the screws. On Monday, February 19, equipment maker Forevia announced that it will reduce its global workforce by ten thousand between now and 2028 to become more competitive in Europe. The company is well placed to gauge the scale of the emerging wave, as it actively works for major Chinese manufacturers. It can also see that its competitors in China are preparing to expand beyond their borders.
CHINA POURS PRODUCTION SURPLUS INTO THE WEST
For three months now, concern has been growing in the West about the acceleration of investments in the Chinese manufacturing industry and the excess production capacity that is accumulating . Solar panel production in China already exceeds the size of the global market, according to estimates from the International Energy Agency. Capital spending on cars increased by 18% in 2023. Since consumption in the country does not recover, all these surpluses are exported at rock-bottom prices.
WINDS OF TRADE WAR
Alarm bells are ringing in Washington, Brussels, Berlin and Paris. The Financial Times reports that an American delegation led by Jay Shambaugh, undersecretary for international affairs, went to Beijing in early February to warn the authorities of the risk of retaliation from his country and the Europeans.
But the Chinese Economy Minister, He Lifeng, had no problem pointing out that it was the American measures adopted under the Inflation Reduction Act, aid to industry, that had triggered the powder keg. And the investigation launched by Brussels into Chinese subsidies for electric vehicles. We are entering the tumultuous waters of the trade war.
Europe and the United States, in their obsession with reindustrialization and decoupling, are evaluating their dependence on China's domestic economy. It was China's vigorous recovery that brought the world out of the 2008-2009 financial crisis. But this time Beijing does not want to embark on expensive construction projects or support the consumption of its 1.4 billion inhabitants. Priority to industry. To the detriment of ours.
(Extract from the eprcomunicazione press review)
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/cina-industria-verde-dipendenza-usa-ue/ on Sat, 24 Feb 2024 06:25:23 +0000.