China Says Innovations Drive Rapid Expansion of EV Firms as Janet Yellen Highlights ‘Overcapacity’ Fears

By Trisha Andrada

Apr 08, 2024 05:20 AM EDT

The rapid growth of China's electric vehicle (EV) companies, according to Commerce Minister Wang Wentao, is not attributable to government subsidies but rather to constant innovations.

Yellen Worries About Influence of China's Industrial Overcapacity on the US Economy

According to CNBC, US Treasury Secretary Janet Yellen expressed grave alarm on Saturday, Apr. 6, on the potential effects of China's industrial overcapacity on the American economy. Yellen is in China for discussions on managing the bilateral economic relationship and advancing American interests.

After meeting with Chinese Vice Premier He Lifeng, Yellen said Saturday that Washington and Beijing would undertake intense discussions to resolve macroeconomic imbalances and overcapacity.

CHINA-AUTOMOBILE-XIAOMI — Chinese electronics company Xiaomi's first electric vehicles 'Xiaomi SU7 model' are seen on display at a launch event in Beijing on March 28, 2024. China is the biggest electric vehicle market in the world, a battle royale featuring both established carmakers as well as upstarts such as Xiaomi, which launched its first EV on on March 28.
(Photo : MICHAEL ZHANG/AFP via Getty Images)

Also Read: China's Xi Jinping Warns Joe Biden on Tech Export Restrictions, Says Beijing Will Not 'Sit Back' if US Continues to Impose Them

According to Wang, 'Overcapacity' Claims Are Baseless

On Monday, Apr. 8, Chinese news agency Xinhua quoted Wang saying that the United States and Europe's accusations of "overcapacity" are unfounded. He said that China's competitive market and well-established supply chain system were the reasons for the country's EV advantage.

The comments were made by Wang at a roundtable discussion in Paris on Sunday, Apr. 7, with around ten Chinese firms' representatives, according to a statement from the commerce ministry. These companies included EV manufacturers Geely and BYD and EV battery producer CATL.

The statement said that the roundtable discussion covered a range of subjects, including the European Union's investigation into Chinese electric car imports and allegations of subsidies.

Wang praised China's EV sector as it addresses climate change and promotes green and low-carbon transition. He said that Chinese companies may rest certain that their "legitimate rights and interests" would be safeguarded by the government. Last October, the EU investigated applying taxes on Chinese battery EV imports to counter state subsidies and level the playing field after a shipment surge.

Also Read: Dutch Chip Giant ASML Set to Adhere US Demands on China Exports

Sectors