Economist Justin Lin urges West to adopt ‘Eastern wisdom’ as China moves up value chain

Prominent economist Justin Lin Yifu, a former chief economist at the World Bank and dean of Peking University's Institute of New Structural Economics, has publicly challenged the Western narrative of Chinese industrial 'overcapacity.' Speaking at Hong Kong Chu Hai College, Lin presented a direct comparison with Germany to highlight what he called a 'complete double standard.' He noted that Germany exports about 4 million vehicles annually, representing roughly 80% of its total production. In contrast, China exports around 7 million vehicles, which is only about 20% of its massive output, with the vast majority consumed domestically. Lin argued that if Germany's high export ratio is the benchmark, China's industry could be viewed as having 'undercapacity.'

Lin's defense is a direct rebuttal to accusations from the US and EU that China's state-backed industrial policies, which he has championed for decades, create market distortions and dumping. While acknowledging past domestic issues with 'neijuan' (excessive internal competition), Lin dismissed the current international criticism as a rhetorical trap for developing nations. He urged advanced Western economies to draw on 'Eastern wisdom'—referring to China's strategic, government-guided approach to climbing the value chain in sectors like electric vehicles and green technology—instead of resorting to protectionist measures. This debate is central to escalating trade tensions as China solidifies its position as the world's largest car exporter and a leader in high-tech manufacturing.