On May 5, 2026, Chinese Ambassador to the United States Xie Feng gave an exclusive interview to Senior Foreign Policy Writer Tom O’Connor from Newsweek on U.S. President Donald Trump’s visit to China and China-U.S. relations.

Tom O’Connor asked:China and the U.S. clashed on tariffs last year. The tensions have lowered over the past months, but some remain concerned that the problem of trade imbalance has yet to be fundamentally resolved, and China’s industrial overcapacity is continuing to increase. What’s your response?

Ambassador Xie said that history has proven it once and again thata tariff war or trade war produces no winner, damages the interests of both sides, and hurts the whole world. Under the guidance of the two Presidents, China and the U.S. have reached a series of common understandings through six rounds of economic and trade consultations, and have stabilized bilateral economic and trade relations. This has not come easily and should be cherished. But it is still far from enough. We hope the U.S. side will move further ahead, and completely remove the unilateral tariffs and other restrictive measures.

Ambassador Xie pointed out that the issue of imbalance is a highly complex one, and should be viewed from a comprehensive perspective. There are imbalances both in goods trade, and in service trade; imbalances both in the current account, and in the capital account; and also imbalances in the development stages of different countries and regions. Therefore, it would be unfair to stress only imbalances in goods trade. For instance, in terms of trade in services, the U.S. runs a surplus with most economies. In frontier technology sectors, based on capital market valuation trends, the AI industry alone is expected to generate a surplus of over US$1 trillion annually in U.S. services trade over the next decade. In terms of the capital account, the U.S. is also running a huge surplus annually as a primary destination for global capital inflows. At recent G20 meetings, some members already warned that the issue of financial imbalances should not be dismissed.

Ambassador Xie said that the allegation regarding so-called “China’s industrial overcapacity” is equally untenable. The internationally accepted core metrics for identifying overcapacity are the capacity utilization rate, inventory levels, and profit margins. In China in the first quarter of this year, the capacity utilization rate of industrial enterprises above the designated size nationwide was 73.6%, with inventory levels remaining stable and industrial profits growing 15.5% year-over-year. All the indicators were generally within a reasonable range. Despite tariff pressure, China’s foreign trade expanded last year, with total goods imports and exports reaching a record high, which speaks to the irrepressible demand of the global market for China’s industrial capacity. For Global South countries, in particular, high-quality industrial capacity is not excessive, but in dire scarcity. The more, the better. Amid the global green transition, China’s flagship products such as electric vehicles, lithium-ion batteries, and photovoltaic products are all much-needed high-quality industrial goods, which not only meet China’s domestic demand, but also help bridge the global gap between renewable energy supply and demand, and make a significant contribution to energy conservation, emission reduction, and decarbonization. Such industrial output serves the interests of all and should be welcomed, rather than questioned or suppressed.