Beijing again rebuffs accusations of overcapacity following Yellen meetings

Beijing continues to dismiss Western concerns over cleantech overcapacity.

On Monday, Deputy Finance Minister Liao Min held a presser to discuss the results of recent high-level meetings between US Treasury Secretary Janet Yellen and Chinese officials.

ICYMI: Chinese cleantech overcapacity has become a source of growing tensions between China and the West in recent months.

• Yellen recently blamed Chinese overcapacity for “distorting global prices and production patterns.”

But Liao couldn’t agree less:

• “So-called 'overcapacity' is a result of market mechanisms at work. Supply-demand imbalances are common and can occur in any market-based economy. Addressing these issues primarily requires the market to adjust in accordance with market laws.”
• "Current [cleantech] production capacity falls far short of meeting future market demand, especially given the immense potential demand from developing countries."

Get smart: China's cleantech overcapacity is primarily a result of market-driven competition between world-class private firms vying for global market dominance.

• That makes Beijing less than willing to interfere in their operations, regardless of complaints from key trading partners.

Get smarter: Overcapacity-driven price drops in Chinese cleantech equipment are resulting in record renewables installations and NEV penetration rates, both in China and abroad.

• These are not only boons to global decarbonization efforts, but may also accelerate the market's rebalancing away from overcapacity, to Liao's point.