用车|山东规划2020年建920座充电站 35万充电

Editor's note: Mei Xing is a special commentator on international affairs for CGTN. The article reflects the author's opinions and not necessarily the views of CGTN.

Recently, some media outlets in the U.S. have been hyping the so-called "China overcapacity" narrative, targeting China's renewable energy sector. They allege the industry is awash in excess production and is causing global price distortion and market disruption through exports.

But this narrative doesn't bear scrutiny due to a host of reasons.

First, growth in exports does not equate to overcapacity. In a globalized economy, it is unrealistic to confine the concept of supply-demand balance within national borders, or label competitive, high-quality exports as "excess capacity." After all, the very foundations of international trade lie in comparative advantage and global specialization.

It is true that with China's green energy industry shifting into high gear, related exports have risen. In 2023, the combined export of China's "new trio" – new?energy vehicles (NEVs), lithium-ion batteries, and photovoltaic products – exceeded 1?trillion RMB ($138.9 billion) for the first time, rising by nearly 30 percent.

But can this be equated to "overcapacity"? If producing more than domestic demand constitutes overcapacity, then what should we make of the facts that roughly 40 percent of U.S. chip sales come from China, and Germany exports up to 80 percent of its automobiles? Aren't all these perfect examples of "overcapacity" on the part of the U.S. and Germany?

Moreover, China is not "dumping" its excess output abroad. Even in the first half of 2025, when outbound shipments of its NEVs grew briskly, they still represented only about 41?percent of all Chinese vehicle exports, remaining secondary to the projected domestic demand, which was for 16?million NEV units for the full year.

Economy-wise, the very claim that China is overly dependent on exports is in itself inconsistent with the accusations. Export dependency refers to the share of exports in a country's overall economy. According to World Bank data, exports accounted for 19 percent of China's GDP in 2023, making it 130th out of 155 countries. In 2024, the figure rose slightly to 20 percent, still well below that of countries like Germany and France. Judging a country's export dependency should be based on data, not perception.

Let the numbers speak for themselves.

Second, China's capacity utilization remains within a reasonable range. Typically, a prolonged capacity utilization rate below 70 percent, coupled with high inventory levels, signals overcapacity. However, Chinese NEV manufacturers have a capacity utilization rate above 80 percent. For example, Chinese automobile maker BYD's capacity utilization rate has been above 99.5 percent for four consecutive years. The capacity utilization of CATL, a Chinese company leading in battery manufacturing globally, reached approximately 76 percent last year.

Third, the global demand for high-quality production capacity is bigger than supply. Let's take NEVs as an example once again. The International Energy Agency calculates that achieving global carbon neutrality will require annual NEV sales to reach around 45 million units by 2030. China's electric vehicle production in 2024 was approximately 12 million units – less than 30 percent of that target.

The global demand for power batteries is expected to reach 3,500 GWh by 2030 – more than four times the global shipment volume in 2023, and far beyond current supply capacity.

What the world faces is not a surplus of high-quality green production capacity, but a shortfall.

In addition, Chinese-made products are known for their competitive prices. As one of the most fiercely competitive markets, China has, through a process of survival of the fittest, developed industrial and supply chains with strong global competitiveness. This May, for example, China reached a record-high market share in Europe's hybrid vehicle sector – a clear vote of confidence from consumers through their purchases.

When countries lower barriers and open their markets, international commerce circulates, revitalizes, and grows. On a global scale, new?energy capacity is not in surplus but in short supply; the rise of China's new?energy industry is a contribution to the world, not a threat.

The global new?energy sector should resist closure and restrictions and instead embrace openness and cooperation. Only then can it advance steadily.

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