Lu Han

BEIJING, Mar.23 (China Economic Net)-Speaking at the ongoing China Development Forum 2026, Professor John Quelch, former Dean of the Miami University Business School, shared his insights on the recent US decision to initiate a Section 301 investigation. In an interview with China Economic Net, he emphasized that the investigation was not specifically aimed at China, The investigations into forced labor and overcapacity target 60 and 16 countries, respectively. "It's more of a negotiation tactic," he added. Quelch further noted that he believes both China and the US would not be significantly impacted by the outcome of the investigation.

At the forum, he highlighted the growing European presence in China, stating, "We are seeing significant investment from German automakers and European pharmaceutical companies like AstraZeneca. If US companies hesitate to invest in China, European firms are quick to fill the gap. Whether in pharmaceuticals, healthcare, or high-tech, European companies need the Chinese market."

The US government has announced it will initiate new trade investigations into "excess industrial capacity" across 16 major trade partners, including China. Additionally, the Office of the US Trade Representative has singled out China's automotive industry as a sector facing so-called "overcapacity."

Quelch argued that overcapacity is a natural part of any emerging industry. "Whenever there is innovation, multiple companies tend to enter the market," he explained. "Sometimes, the overall supply generated by the sector outpaces global demand." He cited the green transition and the electric vehicle (EV) industry as an example, where, on occasion, overcapacity can emerge. However, Quelch is confident that the market will go through a "shakeout." "We've already seen many EV companies go out of business or be absorbed by larger firms. This is natural. Whenever there's an exciting new market opportunity, this kind of adjustment happens."

Quelch further stated that he does not view "overcapacity" in EVs as a long-term issue. "If you consider it a long-term problem, I don't agree. To me, it's simply the prelude to a market shakeout, where only a few truly top-tier companies will survive in that sector."

James X. Zhan，Chair of the Executive Board for the World Investment Conference (WIC) shares a similar view, "When it comes to the green economy and the manufacturing of green products, the situation is different. These sectors require new productive capacity and the development of new products. I would distinguish these from the traditional industries facing overcapacity."