China’s Xi Jinping cautions against energy investment overload at meeting

At a meeting with major business figures and economists, President Xi Jinping said an excess of investment into new energy would be counterproductive

President also repeated assertion China is ‘level playing field’, affirmed equal rights for foreign and domestic companies

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Xi Jinping has cautioned against an excess of investment into certain sectors, which could deprive others of necessary resources. Photo: Xinhua

Published: 11:00am, 28 May 2024

President Xi Jinping warned against a lopsided rush of investment into the new energy sector and promised China would be a place for fair competition in a meeting with business executives and economists, held as a row with the US and Europe over purported industrial overcapacity is all but certain to escalate.

Xi, who previously warned against economic bubbles stemming from pouring an excess of resources into certain fields, said support for the “new three” commodities – electric vehicles, lithium-ion batteries and solar panels – must be “adapted” to local conditions.

The new energy industry should not be the sole focus, he said at a meeting with business executives and economists on Thursday, as the transformation of traditional industries can also develop “new productive forces” – a term coined last year to describe up-and-coming sectors, mostly tech-related, which could take the place of traditional standbys like real estate as drivers of economic growth.

“If a company collapses within a few years of its establishment, then our development of modern industries and cultivation of new productive forces will not be sustainable. The enterprise itself must develop internal strength,” the president was quoted as saying in a detailed account of the meeting from state news outlet Xinhua published on Saturday.

Xi made the comments when responding to Zhang Bin, a researcher at the Chinese Academy of Social Sciences, who discussed fierce domestic competition and declining prices.

The meeting, held in Jinan, Shandong province, was attended by executives from across state and private sectors, including personnel from tech start-ups, Hong Kong firms and foreign investment houses. The high-level conclave was closely watched, as it comes in advance of the heavily anticipated third plenum of the Communist Party’s Central Committee – a gathering which typically unveils major economic policy.