European green industries look to China for upturn, debunk overcapacity claim

A beacon of the successful collaboration between China and Croatia, the wind farm also epitomizes the trend in recent years that the cooperation between China and European countries boasts great potential, particularly in green energy development.* The BYD plant will boost Europe's green transformation and improve the wellbeing of local people. Moreover, healthy competition with Chinese companies has also promoted innovation and R&D by European companies, said Kiszelly.* The China-Europe cooperation in the green sector is poised to lead to more significant advancements in the global drive for sustainability.* However, given the rise of China's EVs, lithium batteries and photovoltaic products, as well as its promising green cooperation with the globe, some American politicians and media have employed the rhetoric of China's overcapacity in new energy industry.

y Xinhua writers Che Yunlong, Chu Yi

BERLIN, May 17 (Xinhua) -- Situated on the Adriatic coast of western Croatia, the Senj Wind Farm has reduced the country's carbon dioxide emissions by about 460,000 tons annually since it was inaugurated in 2021. The cheaper green electricity it generates satisfies the demand of more than 100,000 households in the country.

The green project, developed by China's Norinco International Cooperation Ltd., is a "model of cooperation" that benefits both countries, said Senj Mayor Jurica Tomljanovic. The revenue from its operation has been used to invest in infrastructure, water supply, sewerage, beaches and "everything important for the residents" in the city.

WIN-WIN GREEN COOPERATION

As Chinese battery producer CATL announced the decision to build its second European battery plant in Hungary in 2022, the two countries have witnessed increasing cooperation in advancing many green projects. Chinese carmaker BYD also decided to invest in a production base for its electric vehicles (EVs) in the European country.

Hungarian Minister for National Economy Marton Nagy regarded the investment that came along with the rise of China's EV industry as an opportunity. By welcoming Chinese companies, Hungary has become a hub for electric car and battery manufacturing.

Cooperation with China is not only beneficial to Hungary, but also to the EU as a whole, Zoltan Kiszelly, director of the Center of Political Analyses at Hungary's Szazadveg Institute, told Xinhua in a recent interview.

The BYD plant will boost Europe's green transformation and improve the wellbeing of local people. Moreover, healthy competition with Chinese companies has also promoted innovation and R&D by European companies, said Kiszelly.

The entry of Arcfox, the EV brand of Chinese giant automaker Beijing Automotive Industry Corporation, into the European market through Spain last week made another significant mark in China-Europe energy cooperation.

In collaboration with Spanish Atium Logistic Group, Arcfox has established a logistics center for vehicle storage, deposit, and exportation at the port of Ferrol in northwest Spain. The center will cover a storage area of 9,000 square meters. By 2025, the Chinese firm expects sales of 5,000-8,000 units in the European market.

"This is an initiative with a long-term vision that promotes Ferrol's prominence on the map of global logistics and, of course, of China, which could be a magnet for new investments," said Francisco Barea, president of the Port Authority of Ferrol.

In the northeastern Spanish city of Barcelona, a new pact signed in April between Spain's Ebro-EV Motors and China's Chery Automobile will not only turn the city into an EV production center but also deliver benefits to its residents.

The joint venture created by the pact will re-employ some 1,250 former auto manufacturing workers, who lost their jobs in 2021 when Nissan closed its Barcelona plant.

Rosa Maria Jimenez was one of them. "For such a large and important company in China as Chery to come here means that we'll be able to continue doing what we know best, which is making cars," Jimenez told Xinhua.

"This is going to create many jobs and not only for the workers in the company itself but all those jobs around that are connected to a car manufacturer," Jimenez added. The joint venture is expected to produce 150,000 vehicles a year in the Zona Franca port area.

HIGHLY ANTICIPATED

The China-Europe cooperation in the green sector is poised to lead to more significant advancements in the global drive for sustainability.

Committed to providing high-quality products in coping with climate change, the Chinese new energy sector has contributed remarkably to the green transformation of countries worldwide, not least the EU members, said China's Ministry of Commerce spokesperson He Yadong in April.

As manufacturing powerhouses, China and Germany are reinforcing collaboration in emerging sectors, including EVs and other green transformations. A growing number of Chinese enterprises are seizing new opportunities in Europe's largest economy by joining hands with local partners. A report by the Germany Trade & Invest earlier this week showed the country's foreign direct investment projects from China in 2023 surged by 42 percent year-on-year.

According to the report, one-fifth of investment projects by Chinese companies went to Germany's renewable energy sector, tripling the number in 2022. The increasing global engagement of Chinese firms has benefited Germany, as their investments have contributed to Germany's goal of achieving climate-neutral production by 2045, said Thomas Bozoyan, author of the report.

"China and Germany could be important partners in the global climate goals, which can only be achieved together. We would welcome Chinese companies coming to Germany and producing here," Hildegard Mueller, president of the German Association of the Automotive Industry, said in an interview with Xinhua on Tuesday. She noted the rapid ramp-up of the Chinese EV market has benefited the European country technologically.

In April, Zhu Jing, charge d'affaires of the Chinese Mission to the EU, also highlighted the strong consensus between China and Europe on green and low-carbon development at a tech forum held in Brussels. He emphasized eco-friendly cooperation between the two parties, pointing to substantial opportunities for collaboration in technology research and development, standardization, and industrial development.

"The pressing challenges of climate change entails enhanced green cooperation between China and the EU, which will not only expedite their green transformation but also contribute significantly to achieving the UN Sustainable Development Goals," Zhu said.

OVERCAPACITY FALLACY

However, given the rise of China's EVs, lithium batteries and photovoltaic products, as well as its promising green cooperation with the globe, some American politicians and media have employed the rhetoric of China's overcapacity in new energy industry.

Experts and officials from countries and international organizations refuted this fallacy and pointed out that politicizing China's new energy industry out of conservative protectionism to curb its development momentum shows no good signs for the global consensus and trend towards green and low-carbon pursuits, or for the burgeoning development of electric vehicles worldwide.

"The fact that buyers still desire Chinese EVs suggests that the global market is not saturated yet and the assertion of overcapacity in China may be misplaced," said Eunice Kamwendo, a senior official from the United Nations Economic Commission for Africa.

Mueller also regarded the claim as "questionable", saying that "the Chinese numbers do not speak for it."

The German auto association chief said that around 16 percent of the cars produced in China are exported, while the German car industry has higher export figures, with three out of every four produced cars exported. "We are not the right people to complain about overcapacity," instead, fair competition should be embraced globally and that is good for all parties, she emphasized.

Against the background of huge demand for new energy in the world, China's production capacity advantages have played an important role in promoting the globe's carbon-neutral goal. The green cooperation with China taking place in multiple European countries naturally dispels the unfounded claim.

From a global perspective, overcapacity in EVs is not happening, said Wu Kegang, a former China adviser to the British Chambers of Commerce. He suggested that more Chinese companies should consider deepening cooperation and building EV manufacturing closer to the UK and EU markets.

As to reducing global carbon emissions, Carl Fey, a professor of strategy at BI Norwegian Business School, told Xinhua, "The Chinese government deserves a lot of credit for early recognizing and believing that electric vehicles could be a solution."

In the short term, it's good that the Chinese companies produce more "good quality, affordable electric cars from several manufacturers" to the world; in the long run, it's also good that the European and U.S. vehicle-makers can compete in the global arena, Fey said.

"China has done a lot to help the world move towards a green future. And that is encouraging," he added.

(Xinhua reporters Zhao Xiuzhi in London and Zhang Baoping in Harare also contributed to the story.) (Video reporters: Zhang Yuliang, Zhang Zhaoqing, Li Hanlin, Che Yunlong, Kang Yi, Chen Hao, Li Chao, Yuan Hengrui, Attila Volgyi, Geza Molnar; Video editors: Zhang Mocheng, Wei Yin, Zheng Xin, Zhang Yichi)