Stay informed with free updates
Simply register at Chinese trade myFT Digest – delivered straight to your inbox.
Xi Jinping responded to Western criticism of China’s oversupply as Beijing relies on manufacturing to boost its economy, arguing the country’s exports help ease global inflation and support an energy transition own.
The Chinese president told visiting German Chancellor Olaf Scholz on Tuesday that “both sides should be wary of rising protectionism” and “insist on examining production capacity issues objectively.”
“China’s exports of electric vehicles, lithium batteries, photovoltaic products, etc. have not only enriched global supply and alleviated global inflationary pressure, but also made a great contribution to the global response to climate change and green and low-carbon transformation,” Xi said, according to state media.
The comments come as China faces growing resistance from trading partners to an influx of cheap exports, with Beijing trying to offset the real estate slowdown by investing in manufacturing.
The EU has launched a wave of anti-subsidy investigations into Chinese products, including electric vehicles, solar panels, wind turbines, trains and other products.
Last week, US Treasury Secretary Janet Yellen bluntly warned her Chinese counterparts that Washington would not tolerate a “supply shock” due to artificially cheap Chinese imports being dumped on its markets.
German companies have a strong presence in Chinese markets, including groups such as Volkswagen and BASF, complicating Germany’s stance on protectionist measures.
But German companies active in China are increasingly concerned about diminishing market access. Two-thirds of companies surveyed by the German Chamber of Commerce in China said they faced “unfair competition.”
Local Chinese companies still enjoyed preferential access to government procurement, and uncertainties reigned in areas such as cross-border data transfer, said Maximilian Butek, executive director of the German Chamber of Commerce in East China.
This government support comes as Chinese companies become globally competitive in areas such as automobiles, giving them an added advantage over international rivals, he added.
“Why do you need to protect an industry where local companies are fully equipped to compete in international markets? » said Butek.
Xi also told Scholz that China was not contributing to the conflict in Ukraine, warning that critics should “not add fuel to the fire.”
The Chinese president has forged a close partnership with his Russian counterpart Vladimir Putin, with Beijing buying oil from its neighbor and Chinese companies selling billions of dollars of goods ranging from cars to machine tools.
The United States has said China is filling a significant gap in Russian industry created by Western sanctions by selling dual-use products that can be used to make weapons.
