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What fuels global trade imbalances: China’s overcapacity or America’s failure to adapt?
Economists highlight the potential for China’s green manufacturing capacity to support the global energy transition, despite overcapacity fears
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China’s industrial overcapacity should not be singled out for blame amid trade imbalances, as economies worldwide are struggling to adapt to shifts in the global economy, contributing to mounting pressures, a prominent Chinese scholar said in comments directed at the United States.
“The reason why our imbalance is becoming a bigger problem is that the rest of the world is having a bigger problem in adjusting the economic structure,” said Huang Yiping, dean of Peking University’s National School of Development and an adviser to China’s central bank, on Tuesday.
Speaking at the World Economic Forum’s Annual Meeting of the New Champions in Dalian, Liaoning province, Huang pointed to the US, arguing that Washington’s complaints over Chinese exports hurting manufacturing jobs had overlooked America’s deeper constraints in managing the impact of trade and globalisation.
Discussions of global imbalances featured prominently at the gathering, also known as Summer Davos, as China’s record trade surplus fuels concerns that Beijing’s industrial policy is generating excess capacity that is spilling over into global markets.
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