Spokesperson: US 'overcapacity' narrative essentially used to kneecap other countries' strong industries

The U.S. is essentially using the "overcapacity" narrative to kneecap other countries' strong industries, practice protectionism and trample on market principles and international trade rules in the name of "fair competition," Chinese foreign ministry spokesperson Wang Wenbin said on Tuesday.

Wang made the remarks at a regular press conference in response to U.S. Treasury Secretary Janet Yellen's recent "Chinese overcapacity" narrative.

Based on U.S. logic, U.S. subsidies are "investment in critical industries," whereas other countries' subsidies are seen as "worrying unfair competition," Wang said, adding that U.S. exports with comparative advantage constitute "free trade," whereas other countries' exports with comparative advantage are signs of "overcapacity."

Wang said the U.S. action is nothing but bullying. He reiterates that the rapid growth of China's new energy industries is built on continuous tech innovation, full-fledged industrial and supply chains and full market competition, and China's leading edge is a result of comparative advantage and the laws of the market combined, not by so-called "subsidies."

Wang said by contrast, in recent years, the U.S. signed into law the CHIPS and Science Act and the Inflation Reduction Act to directly intervene in the allocation of market resources through direct and indirect subsidies totaling hundreds of billions of U.S. dollars.

"It's the U.S. who is a big subsidizer of its industries," Wang added.

Subsidies do not guarantee industrial competitiveness, and protectionism does not nurture real business champions, Wang said, adding that the fast-growing Chinese new energy industries are what the world economy needs for green transition, and serve the interests of China, the U.S. and the whole world.

China urges the U.S. to abandon its hypocrisy and double standard, and not to make the same mistake of resorting to protectionism, Wang said.