China's Premier Li Qiang on Wednesday rejected allegations that his country obtains a competitive advantage due to unfair subsidies and stressed the country's reliability in uncertain geopolitical times.
Li, speaking at the World Economic Forum's "Summer Davos" forum in the north-eastern Chinese coastal city of Dalian, said it was not as some people claimed that the competitiveness of Chinese products was mainly based on subsidies from the Chinese government.
The World Economic Forum meets in Davos, Switzerland in January and focuses on broader economic topics, while the summer gathering meets in China and is focused on business and technology.
China's government was not yet so rich and could not afford such subsidies, Li said. He cited research and development and China's large market, which produces new products, as reasons for China's competitiveness.
Trading partners have long accused China of using subsidies to enable companies in the People's Republic to offer low prices for products, leading to distortions in other markets. One example is electric cars made in China. The European Union has slapped additional tariffs on Chinese e-car exports because of this.
Criticism of "China shock" thesis
Brussels has also been concerned for some time about China's rising exports to Europe. Because China's economy was growing more slowly, Beijing was flooding markets worldwide with "subsidized overcapacity," European Commission President Ursula von der Leyen said a year ago. "We are seeing a new 'China shock'," she said at the time at a G7 meeting in Canada.
In Dalian, Li pushed back against the allegations. Beijing is aware that some view China's technological and industrial innovations with concern, he said. Some media outlets, for example, used this to spread "negative, unfriendly and unrealistic theses" such as a "China shock 2.0," he said.
China promotes itself as a "safe haven"
Referring to the turbulent global situation and geopolitical conflicts, Li also promoted the People's Republic as a "safe haven." Despite international energy shortages and "serious disruptions in supply chains," the Chinese economy could still develop in a stable manner, Li said.
In 2025, China's economy grew by 5%, according to official figures. However, high youth unemployment and weak domestic demand are weighing on the outlook for the world's second-largest economy. For this year, Beijing set itself a lower growth target of 4.5% to 5%.
