Chinese Premier counters 'overcapacity' claims, says we 'enrich global supply'

Chinese Premier Li Qiang hits back at the US and the European Union on claims that Chinese firms benefit from unfair subsidies and 'flood' global markets with cheap goods. His comments came during his address at a World Economic Forum meeting in Dalian.

'China's production of advanced electric vehicles, lithium-ion batteries and photovoltaic products, first met out domestic demand, but also enrich global supply', he said in his opening remarks. 'The rapid rise of China's new industries is rooted in our own unique comparative advantages', he added.

China and the European Union are preparing to host talks on the planned EV tariffs on Chinese EVs. China is already facing tariff hikes from the US, with Canada also contemplating similar tariffs. China is facing a slowdown in domestic demand, making it paramount for the second-largest economy to expand its exports. This has triggered trade impositions by major economies, with the US & the EU at the forefront.

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China is currently using various tactics to avert EU tariffs. The country is already contemplating a probe into EU pork imports. China is also talking to other stakeholders, including German car manufacturers, to persuade the EU to reverse its decision. 'The continuous emergence of economies of scale can effectively dilute enterprises' innovation costs, which is the real source of the strong competitiveness of China's new industries', Li said.

China denies overcapacity problems, stating that demand will soon equal supply as the economy recovers. The country is also maintaining its growth target of 5 per cent for 2024. Still, recovery seems subdued due to domestic slump and trade tensions with major markets.