Chinese Foreign Ministry spokesperson Wang Wenbin Photo: mfa.gov.cn

Chinese Foreign Ministry spokesperson Wang Wenbin on Tuesday slammed US Treasury Secretary Janet Yellen’s double standard narrative on “overcapacity”, calling it an act of protectionism, which tramples on the principles of market economy and international rules, and is blatant bullying.

The remarks came after Yellen recently raised the “overcapacity” narrative in an interview with US media, saying the US would provide targeted investment and subsidies to support its strategic industries. She added that the US doesn’t want China to provide huge subsidies to enterprises, which would squeeze US firms out of the market.

“We’re very explicitly subsidizing investments in these important strategic areas. And what we don’t want to see is massive Chinese subsidies to firms with huge overcapacity that will just drive our firms out of business,” Yellen said.

Wang pointed out that the US sees its own subsidies as important investments in key industries, but criticizes other countries for providing subsidies. The US also berates other countries for exporting competitive products, labeling it as "overcapacity", while promoting its own exports as “free trade.”

The US is using the "overcapacity" narrative to suppress advanced industries in other countries. It is nothing but blatant bullying and hegemony, Wang noted.

Wang reiterated that the rapid development of China's new energy industry is built on homegrown tech innovation, the complete supply chain and sufficient market competition rather than relying on government subsidies. 

On the contrary the US has been a major player in doling out government subsidies through the CHIPS and Science Act and Inflation Reduction Act, Wang added.

Wang noted that the rapid development of China's new energy industry is in line with the global economic need for the green transformation, benefiting China, the US and the world. He urged the US to abandon hypocrisy and playing double standards, and to avoid slipping back into trade protectionism.

Now, the Biden administration is reportedly planning to levy 100 percent tariffs on Chinese EVs.

Wang said that China has always opposed the unilateral hike of tariffs that violate WTO rules and will take all necessary measures to safeguard its legitimate rights and interests.