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Tuesday, May 21, 2024

Misconceptions of Xi Jinping on China’s economy

In a recent meeting in Paris, Ursula von der Leyen, the president of the European Commission, expressed her concerns to China’s President Xi Jinping about the issue of “structural overcapacities” in the manufacturing sector. Europe has a history of dealing with overcapacity, such as butter mountains and milk lakes caused by the common agricultural policy. Now, the EU is facing a potential influx of electric vehicles and steel from China, which could threaten industries and jobs in the union.

China’s steel exports have increased by over 28% in the first three months of this year, while exports of new-energy vehicles have risen by almost 24%. In response, the EU is considering implementing “countervailing” tariffs to counteract the subsidies that have helped fuel China’s industrial growth. This move aims to level the playing field and protect European industries from being undercut by subsidized Chinese products.

The EU’s concerns about overcapacity in the manufacturing sector are well-founded, given the potential impact on jobs and industries in Europe. By addressing this issue through measures such as countervailing tariffs, the EU hopes to safeguard its economy and maintain a fair and competitive market for European businesses.

China’s rapid expansion in industries like steel and electric vehicles has raised alarms in Europe, prompting leaders like Ursula von der Leyen to take action. With the threat of overcapacity looming, the EU is working to protect its interests and ensure a level playing field for its manufacturers. As discussions continue between the EU and China, it remains to be seen how the issue of overcapacity will be addressed and what impact it will have on the global economy.

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