The Chinese communist regime has deleted overproduction information on China’s new energy cars from its official website. It comes as both the United States and the European Union have raised serious concerns over China’s industrial overcapacity and dumping of goods in the West.
China observers believe that the government subsidies have caused vicious competition, which harms both the Chinese domestic economy as well as the economies of other countries.
The Price Monitoring Center of China’s National Development and Reform Commission released monitoring data on its official website on Monday, showing that prices of new energy vehicles (EV) in Shenzhen have generally fallen since the beginning of the year, generally by around 5 percent to 10 percent. Among them, the prices of 10 monitored new energy vehicles fell, with the largest drop being BYD Song PLUS New Energy (DM-i 110KM flagship model). The price dropped from 154,800 yuan (about $21,000) at the beginning of the year to 139,800 yuan (about $19,000), a decrease of 9.69 percent.
The monitoring center stated that the price drop of the new energy cars is mainly due to market oversupply, reduction in the cost of batteries, production efficiencies, and the advantages of the entire industry chain.
The center predicted that competition in new energy vehicles will be extremely fierce in 2024. Price wars could take many different forms.
As of April 26, the information can no longer be found on the official website of the National Development and Reform Commission. However, both international media and Chinese media outlets reposted and quoted the data in their reports, saying that the price war for EV cars and plug-in hybrids has intensified this year due to oversupply.
U.S. Treasury Secretary Janet Yellen said on April 25 that the United States is not taking any options off the table to respond to China’s excess industrial capacity.
Ms. Yellen has repeatedly warned China about overcapacity.
During her visit to Beijing in early April, she emphasized that she was particularly concerned about China flooding global markets with electric vehicles (EVs), solar panels, and other new energy goods, which is the result of China’s long-term macroeconomic imbalances. The imbalances are between weak household consumption and excessive corporate investment. Ms. Yellen said that the CCP’s massive support for specific industrial sectors has exacerbated the imbalances and threatens jobs and businesses in the United States and other countries. The German Chancellor also raised the issue during his visit to China earlier this month.
CCP’s Premier Li Qiang denied China’s overcapacity at a press conference on April 16, saying that both supply and demand are global and that China’s new energy industry advantages are not formed by government subsidies for industries.
The CCP’s foreign ministry condemned the U.S. accusation on April 23, saying it’s “the malicious intention of curbing and suppressing China’s industrial development, aiming to seek a more favorable competitive position and market advantage.”
Dumping Alarmed the West
The Chinese communist regime is dumping “three new green products” around the world: solar panels, EVs, and lithium batteries to boost the economy, under the slogan of developing ”new productive forces,” which has alarmed the EU and the United States.Cheng Cheng-Ping, a professor at Taiwan’s National Yunlin University of Science and Technology, told The Epoch Times, “China is now suffering from overproduction, domestic prices have fallen sharply, and deflation occurred everywhere. People are not consuming now. Looking into the future, they feel increasingly pessimistic and socially dissatisfied. The discontent will continue to worsen, which will also pose a great threat to the stability of the regime.”
W. Paul Chiou, a professor at the Department of Finance at Northeastern University in Boston, told The Epoch Times that overcapacity is indeed a problem that the CCP has to face. The main reasons for the overcapacity are China’s state subsidy policy as China still has a planned economy system. Also, China’s entire economic environment does not encourage new innovations.
“Everyone follows the trend in a rush, overcapacity will naturally occur. In the end, it will not be a competition of quality but a price war,” he said.
U.S.-based China affairs observer Wang He told The Epoch Times that there should be an adjustment period for overcapacity. If it is a free market economy, after short- and medium-term adjustments ranging from half a year to two or three years, it will return to normal.
“However, the CCP leader Xi Jinping wants to use authoritarian control to develop the economy, completely deviating from the logic of the economy. The overcapacity is putting Xi in a very difficult position,” he said.
“The biggest problem is that China’s domestic demand is insufficient, and its economic structure has put the cart before the horse in terms of consumption power and investment. China’s economic crisis continues to worsen. The CCP has introduced many policies, but none of them is effective. Now, they are dumping goods globally, which will only make it worse.”
He said that the CCP’s aggressive policy of dumping goods globally is subversive and poses the greatest danger to the global economy.
Mr. Wang said that the dumping will trigger a strong response from other countries. “Various countries are using trade policies and anti-dumping investigations to block China’s ‘three new green products’ exports, and then a trade war will break out to contain the CCP economically.”
