By David J. Lynch, The Washington PostWorkers dock a container vessel at Qingdao Port, east China's Shandong Province on Feb. 11, 2024.
“You just have expanding Chinese capacity in a range of sectors, some sectors that are strategic, other sectors that are priorities for the U.S. and Europe. And that’s generating tension,” said economist Brad Setser, an Obama administration Treasury Department official. “The rest of the world also wants to produce manufactured goods.”
As China’s global manufacturing dominance swells, the stakes are high for automakers, especially in Europe. China in recent years has emerged from auto industry obscurity to pass Germany in auto exports. The battle for auto industry supremacy is just one element of a worsening trade climate between China and its major customers in Europe and the United States.
A spokesman for the Chinese Embassy in Washington dismissed concerns about the country’s swollen manufacturing sector. Chinese economic planners have long favored state-owned firms in scores of industries, with cut-rate financing, cheap or even free land, reduced electric bills and other assistance. In total, the generous aid - equal to more than 1.7 percent of China’s economy - is more than twice as large as in other countries, including the United States, according to a study by the Center for Strategic and International Studies.
The combination of weak consumer demand and robust factory production leaves China with a surplus of goods that it needs to unload on global markets.
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