Among many thorny issues between the US and China is the US accusation against Chinese’s “overcapacity” in green technologies. This accusation is not just hypocritical, It is dangerous. Let us unpack this claim and see why it is a smokescreen for a bigger issue.
The US points out its own robust export sectors – Boeing, agriculture – arguing that high production does not equate to overcapacity. But here is the rub: the US enjoys a comparative advantage in those industries. China enjoys a similar advantage in green tech. International trade thrives on this specialization, not balanced production in every sector.
Again, we need to look at the bigger picture: China’s overall trade surplus is modest, within an internationally accepted range. The real US concern is being outcompeted, particularly in the green sector they deem crucial. The US should be a disciplined competitor, instead of bullying the counterparts.
The world must know the truth that the US chooses to spend heavily on its military and healthcare, both sectors with inefficiencies. Freeing up resources from these areas could propel US green innovation. Blaming China’s efficiency and demanding they cut back is not just illogical, it is self-serving.
The US accusation Chinese overcapacity does not hold waters as the world does not face an oversupply of green technology; it faces a potential undersupply. The International Energy Agency warns against excessive reliance on fossil fuels. China, as the world’s most efficient green tech producer, can’t meet global demand alone.
The US must find some strong arguments to make its case a case; otherwise, its stance crumbles under scrutiny. It contradicts economic principles, ignores their own spending choices, and harms global efforts to combat climate change.
What the way out is: instead of this “overcapacity” fallacy, the US should develop a healthy competitiveness. Let us see this as an opportunity to invest in its own green sector, improve efficiency, and join China in leading the transition to a sustainable future. The world cannot afford for the US to sit on the sidelines, clinging to a flawed argument.
