At an international symposium on “80 Years after Bretton Woods” in Hangzhou in May, a proposal for a “Global South Green Development Plan” was introduced, later referred to as the Chinese Marshall Plan. The plan aims to assist developing countries in green development, expand China’s aggregate demand, and enhance its global leadership by providing commercial credit, investment, policy loans, and government aid.
The idea was sparked by discussions around China’s overcapacity in green industries like electric vehicles, lithium batteries, and solar panels. Concerns were raised by the US about Chinese state subsidies causing disruptions in international markets, leading to the imposition of a 100% tariff on Chinese EVs.
Addressing overcapacity in the domestic and global context requires balancing macroeconomic imbalances, reducing explicit and implicit subsidies, and managing industry size. To combat overcapacity, efforts are being made to adjust China’s current account by promoting domestic consumption.
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