WTO meeting amid threat of overcapacity in Chinese industry

This 13^E The Ministerial Conference of the World Trade Organization (WTO) is being held in Abu Dhabi from Monday 26 February to Thursday 29 February, without great ambitions and against a backdrop of trade tensions with China. The only agreement that could be reached during the four days of talks is to ban fishing subsidies that contribute to the depletion of fishing resources.

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On other issues, particularly regarding new rules governing industrial policies and reform of the WTO, there are still numerous disagreements. The Geneva body has been weakened since the United States blocked the work of its appeals body, which is needed to resolve trade disputes. That’s especially because Washington and Brussels accuse Beijing of distorting international competition by supporting its industry. “The context has become more complex with more offending countries”, Observes the French diplomat.

In its February 19 edition, The Financial Times US Treasury officials have traveled to China to raise concerns with Vice Premier He Lifeng about supporting China’s manufacturing industry, whose overcapacity will lead to a flood of low-cost goods in strategic sectors such as wind power, batteries and electric vehicles. . The topic will be discussed at the next G20 finance meeting in Brazil at the end of February.

“Real Estate in Distress”

For its part, Brussels announced on February 16 the launch of an investigation against a subsidiary of Chinese railway manufacturer CRRC, the world’s number one in the sector, on suspicion of receiving subsidies that allowed it to charge low prices. It comes in addition to another European investigation into public aid that has benefited the country’s electric vehicle manufacturers. Between 2021 and 2023, their market share in the European Union will increase from 4% to 8%, according to estimates by the firm Innovave. Western countries are not the only ones on the defensive since India imposed the end of 2023. Imports Chinese steel and laser machines.

“With the real estate sector in crisis and the infrastructure sector in full recession, Chinese credits are being redirected to the manufacturing industry on a large scale,

Alicia García Herrero, Natixis Chief Economist for the Asia-Pacific region emphasizes, and whatever the price, they must sell what they produced. »

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