Photovoltaic panels in Sihong, East China's Jiangsu Province Photo: VCG

China's new-energy industry has gained advantages through self-improvement and sufficient market competition, rather than by government subsidies, Chinese Premier Li Qiang said on Tuesday, stressing that China is ready to work with Germany and the EU to uphold fair competition and open cooperation.

Li made the remarks when holding talks with German Chancellor Olaf Scholz in Beijing on Tuesday.

On the issue of production capacity, Li stressed that the issue should start from economic laws and be viewed objectively and dialectically from a market viewpoint and a global perspective.

From a market viewpoint, the amount of production capacity is determined by the relationship between supply and demand, and having production moderately greater than demand is conducive to full market competition and promoting the survival of the fittest in the market, Li said.

From a global perspective, the production capacity of different countries is determined by their comparative advantages. As long as countries strengthen cooperation, they can achieve common development, he added.

China's new-energy industry has gained advantages through self-improvement and sufficient market competition, rather than by relying on government subsidies, Li said, noting that the high-quality production capacity that China's new-energy industry continues to provide will make important contributions to global green development.

China is ready to work with Germany and the EU to uphold fair competition and open cooperation, the premier said. He expressed hopes that the EU side will uphold market-oriented and fair principles, and prudently use trade remedy measures.

Chinese officials have recently hit out at some US and European politicians over their accusations of "overcapacity" in China's new-energy industry, emphasizing the importance of market adjustment.

"Overcapacity" is the result of market functions at play, and it is an issue coherent with market economies, including in the US, and the issue should be addressed by abiding by market principles, officials said.

In responding to the "overcapacity" issue brought up by the West, Chinese Foreign Ministry spokesperson Lin Jian told a routine press conference on Wednesday that the narrative that "Chinese overcapacity is sending shockwaves across the global market" is misplaced.

Lin warned that efforts to erect more trade protectionist barriers under the guise of the flawed narrative of "China overcapacity" will not make one's industry stronger, which will only serve to disrupt the smooth and stable operation of the global supply chain and impede global green transition, and the development of emerging industries.

China has emphasized on multiple occasions that production capacity issues should be treated in accordance with the principles of the market economy, Lin noted.

"Seen from the context of economic globalization, and analyzed from the perspective of global division of labor, the competitiveness of the Chinese new-energy industry is being obtained through genuine skills and full market competition, rather than gained from government subsidies," said Lin.

Jin Xiandong, an official of National Development and Reform Commission, China's top economic planning agency, said during a separate press conference on Wednesday that a moderate surplus of production over demand is conducive to market competition and natural selection, and the phenomenon is very common in the world.

As for attempts to link production capacity issues with international trade, and to claim that a surge of exported goods indicates "overcapacity," Jin said that "the allegations are not tenable."