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How Chinese Savings Can Support the Global Green Transition

China’s high savings rate – and the excess industrial capacity to which it inevitably leads – should be viewed not as a problem to be solved, but as an opportunity to be seized. The EU, in particular, should welcome cheap green goods from China, thereby harnessing Chinese savings to lower the cost of the clean-energy transition.

MILAN – Tensions are again rising in the global trading system, with China becoming the target of criticism from many sides. US Treasury Secretary Janet Yellen has urged market-oriented allies to present a “wall of opposition” to the country over its excess industrial capacity, which she argues is a result of generous state subsidies and other industrial policies. Similarly, European Commission President Ursula von der Leyen has called for action against Chinese “subsidized products,” from electric vehicles (EVs) to steel, that are “flooding the European market.”