Chinese supply in solar leads to lower inflation and helps climate transition

The Chinese and the Americans met to discuss trade policy and Chinese 'overcapacity'. According to the Chinese representative Liu: "The countercurrents of protectionism and unilateralism have further extended the climate change governance gap," he said in a speech in China in April, adding that constraints on Chinese solar panels and other technology would increase global costs of the clean energy transition."

If the Americans or Europeans want to protect their domestic industries from Chinese competition, they can do so. But they can't expect all other countries to also do so. Those countries who want to control inflation and the costs of the clean energy transition, and help their consumers and citizens can do so. They can always work with the Chinese to set up domestic manufacturing, and joint ventures, with technology transfer.

The US is a richer country, and can afford to spend more on domestic suppliers, and to protect domestic businesses and workers. While global trade will continue to rebound after the pandemic, there will be fragmentation, between US and China trade blocs. Individual countries should do their best to stay neutral, and trade with both countries.

Reference: https://www.reuters.com/sustainability/climate-energy/us-discussed-overcapacity-chinese-solar-manufacturing-coal-climate-talks-2024-05-10/