China’s leaders, determined to upgrade manufacturing, are steering money towards makers of high-tech products, from semiconductors to electric vehicles (EVs), raising fears that overcapacity will fuel a new wave of cheap exports.
Lending data from China’s central bank offers a glimpse of government priorities: as at the end of September, outstanding loans to the troubled property sector fell 0.2 per cent year on year, but lending to the manufacturing sector jumped 38.2 per cent.
Economists caution that this wave of investment differs in key respects from an earlier capital investment surge that, among other effects, inflated China’s solar panel industry, triggered a trade fight and put scores of companies out of business.
But the trend has alarmed some key trading partners, particularly in Europe, where an investigation into Chinese EV subsidies is under way.
“There is lower consumption in China right now, but you have massive overcapacity that is being pushed out to the world, including in batteries, solar and chemicals,” said Mr Jens Eskelund, president of the European Chamber of Commerce in Beijing.
“Europe and China are like two trains that are going to collide,” Mr Eskelund said, referring to trade.
China’s industrial policy will be on the agenda at this week’s meeting of the Asia-Pacific Economic Cooperation (Apec) forum in San Francisco, where Chinese President Xi Jinping is expected to meet United States President Joe Biden.
この記事は The Straits Times の November 14, 2023 版に掲載されています。
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この記事は The Straits Times の November 14, 2023 版に掲載されています。
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