Beijing’s Ministry of Commerce has published a paper titled “China’s Position On Its Excess Capacity Issue.”
The paper was put out to set straight the pertinent facts and spell out China’s policy line on the so-called excess capacity matter, according to the ministry.
The paper stated that the swift advancement of China’s modern industries is propelled by innovation. The steady and sound functioning of Chinese industries hinges on the ongoing deepening of reforms.
In recent years, the worldwide economic and trade picture has shifted profoundly, with sharpened rivalry among leading nations, the paper noted.
Certain countries and economies harbour growing unease about their industrial competitiveness and standing in the marketplace, turning economic and trade matters into political footballs by talking up the so-called “excess capacity” problem within China, blaming Chinese production capacity for throwing global markets into disarray, and using this as a justification to ramp up restrictive measures aimed at China, thereby fuelling protectionism.
Pursuing protectionism merely throws the global economic and trade order into disorder, weakens the security and steadiness of worldwide industrial and supply chains, obstructs the sound and orderly progress of industrial cooperation, and creates lasting risks for global economic expansion, it stated.
The paper flagged that no inherent link exists between industrial subsidies and excess capacity, and that leading nations ought to lead by example in ensuring adherence to subsidy rules; sizeable export volumes and trade surpluses are not synonymous with excess capacity.
China’s export expansion arises not merely from economies of scale and enhanced innovation abilities but equally from the green transition and industrialisation requirements of various nations.
Global economic imbalance stands as a historical norm with intricate origins, encompassing market forces such as savings-investment structures and the industrial and supply-chain division of labour, alongside institutional forces, including the international financial system and macro-policy interplay.
The claim that “China’s insufficient domestic demand causes excess capacity” fails to align with the facts — China stands not only as a manufacturing powerhouse but also as a major consumer, and not only as the “world factory” but also as a “world market.”
China’s modernisation of industrial development represents not “China Shock 2.0” but “China Opportunity 2.0” for the world, according to the paper.
All parties ought to hold fast to the principle of mutual benefit and win-win cooperation, foster shared development, honour market rules, bolster policy coordination, broaden market openness, generate cooperative opportunities, champion multilateralism, and jointly strive to construct a fairer and more sensible international economic order, together nurturing an open and inclusive global industrial and supply chain cooperation framework, it added.
