China warns against ‘vicious cycle’ of decoupling from the West

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Chinese Premier Li Qiang has warned against a “vicious cycle” of economic decoupling from the West, as Beijing struggles to contain rising global pushback over soaring electric vehicle (EV) exports.

Speaking to international executives at the “Summer Davos” forum in the northeastern city of Dalian on Tuesday, Li also defended his country against accusations that Chinese overcapacity in key green industries has led to dumping of products such as EVs and solar panels on global markets.

“If countries only consider maximizing their own interests, if we ignore the interests of others, and even go back in history and engage in decoupling … it will only raise the economic operating costs of the entire society and the world,” he said.

This will “drag countries … into a vicious cycle of scrambling for a cake that becomes smaller and smaller,” Li added. “This is something that we don’t want to see.”

The remarks by China’s second most powerful leader after Xi Jinping come a day after Canada became the latest Western country to considerimposing tariffs on EVs made in China. The Canadian government said on Monday that its workers faced “unfair competition” from Beijing’s “state-directed policy of overcapacity.” It will begin a 30-day public consultation period next month to assess possible responses.

Last month, the Biden administration quadrupled tariffs on EV imports from China, from 25% to 100%, aiming to protect American jobs and manufacturing. Chinese EV sales to the United States are tiny.

However, the challenges facing China’s EV makers grew when a