Chinese Premier Li Qiang delivered a stern warning at the World Economic Forum in Dalian on Tuesday, highlighting the potential for dire global consequences if nations engage in economic decoupling. He countered criticism surrounding China’s industrial policies, specifically the accusation of overcapacity, labeling such claims as “regressive actions” that would drag the world into a “destructive spiral.” This spiral, according to Li, would be characterized by intense competition for a shrinking pool of resources, ultimately harming all involved.
Li dedicated his speech to defending China’s industrial policies, rejecting accusations of overcapacity and dumping cheap goods onto the global market. He emphasized the significant advancements made by China in science and technology, creating a platform for companies to innovate and enhance their products. He asserted, “Exploration should not be seen as a zero-sum game,” stressing the need for collaborative international relations instead of adversarial ones.
These statements come amidst heightened tensions over trade practices between China and several Western nations. Canada recently announced measures to restrict imports of Chinese-made electric vehicles (EVs), mirroring the Biden administration’s decision to significantly increase tariffs on such imports. The US is planning to raise tariffs on Chinese EVs to as high as 102.5%, while the European Union is also considering tariff hikes up to 48% on certain vehicles. In response, China has hinted at potentially lowering existing tariffs on large-engine cars from Europe if the EU retracts its planned levies on EVs, according to a report by Bloomberg.
Li’s remarks follow a similar call for enhanced innovation by Chinese President Xi Jinping on Monday. Addressing a science and technology conference in Beijing, President Xi Jinping stressed the importance of overcoming foreign dominance in crucial technologies. He emphasized the need for focused efforts to achieve breakthroughs in “bottleneck” technologies, specifically mentioning integrated circuits, industrial machine tools, basic software, advanced materials, scientific research instruments, and seed sources.
Despite challenges such as a prolonged property downturn, weak consumer confidence, and rising local government debt, Li expressed confidence in China’s economic outlook. He reiterated China’s goal of achieving approximately 5% growth for the year, a target set earlier.
