Today, the Chinese government held a press briefing to present its official position on the overcapacity issue by releasing a position paper titled “China’s Position on the So-called Excess Capacity Issue”
Overcapacity has long been one of the most contentious issues in China’s trade relations with both the European Union and the United States. In Washington and Brussels, the prevailing view is that China has continuously directed large amounts of capital into strategic manufacturing sectors through subsidies, policy lending, low-cost land and energy, government procurement, and local industrial policies. Because domestic demand is seen as insufficient to absorb the resulting output, the surplus is ultimately exported at low prices, putting pressure on manufacturing industries in other countries.
That said, the United States and the European Union do not frame the issue in…
