As China continues to upgrade its manufacturing base and expand\nproduction across various sectors, from electric vehicles (EVs) to\nrenewable energy equipment, some Western countries are reviving\naccusations of Chinese \u2018overcapacity\u2019 to justify new tariffs and\ninvestment restrictions. Yet, these latest accusations go beyond\nproduction capacity, reflecting growing concerns in some economies about\nindustrial competitiveness and market position. The broader issue is how\ncapacity, competition, and cooperation should be viewed amid\ntechnological change and global supply chain restructuring. Without a\nuniversally accepted definition, the concept of overcapacity has become\na convenient tool for some politicians to politicise economic and trade\nissues, using China\u2019s subsidies, trade surplus, and export volumes as\nindicators of \u2018unfair\u2019 competition and \u2018overcapacity\u2019.<\/p>\n
China possesses the world\u2019s largest and most comprehensive\nmanufacturing system, enabling it to efficiently supply a wide range of\nindustrial products on a large scale. A Chinese commerce ministry\nofficial, He Shaojun, noted that China\u2019s trade surplus reflects the\ncompleteness and efficiency of its industrial system and is an objective\nresult of changes in global specialisation and trade patterns. For many\nobservers outside China, the country\u2019s industrial rise is often measured\nby the rapid growth of industries such as artificial intelligence,\nelectric vehicles, and advanced batteries. Behind this current\ncompetitiveness lie decades of investment in research and development,\nthe advantages of a vast domestic market, a comprehensive industrial\necosystem, and sustained market-oriented reforms. Although some\ncountries are reviving the old narrative that China\u2019s industrial\ndevelopment is driven by government subsidies, these industries are the\nresult of technological accumulation, industrial upgrading, and\ncontinuous innovation, not merely short-term policy support.<\/p>\n
This manufacturing capacity plays a crucial role in stabilising\nglobal supply, helping to address shortages in various regions caused by\nprotectionism, geopolitical tensions, and other disruptions, while\nserving as a key pillar of global industrial and supply chains. More\nimportantly, China\u2019s industrial upgrading has created opportunities that\nextend far beyond its borders. Foreign-invested enterprises, global\nsuppliers, and consumers have all benefited from China\u2019s integration\ninto international production and trade networks. At the same time,\nrising domestic demand in China, driven by consumption upgrades, the\ngreen transition, and digital infrastructure investment, generates\nsustained demand for products, technologies, and services from around\nthe world. Over the past decade, China has contributed roughly 30\npercent to global economic growth, serving as a vital source of\nstability for the world economy. China supplies over 80 percent of the\nworld\u2019s photovoltaic modules and 70 percent of wind power equipment,\nproviding essential support for the green transition of its trading\npartners. Foreign-invested enterprises account for 16 percent of China\u2019s\ntrade surplus, earning significant returns on their investments.<\/p>\n
This broader perspective is often overlooked in discussions about\nso-called \u2018overcapacity\u2019. For many developing countries, China\u2019s\ncost-effective product supply means greater access to technology,\nequipment, and industrial knowledge. China\u2019s exports of high-quality,\naffordable components and production equipment have lowered the barriers\nto industrialisation for many developing nations. Between 2012 and 2024,\nChina exported more than 30 billion US dollars\u2019 worth of textile\nmachinery to developing countries, helping economies in Southeast Asia\nand South Asia expand their textile manufacturing capacity and become\nmajor producers and exporters of textile products. Through the Belt and\nRoad Initiative, technology-sharing platforms like the Luban Workshops,\nand the provision of affordable renewable energy products, China seeks\nto strengthen the capacity of developing countries to build their own\nsustainable industries. These efforts aim to promote self-reliant and\nsustainable growth by lowering industrialisation barriers, enhancing\ntechnical capabilities, and expanding participation in global value\nchains. A commerce ministry official, Han Yong, stated that instead of\nusing industrial policy as an instrument to restrict the development of\nother countries, all nations should focus on expanding global\ndevelopment opportunities through reasonable, transparent, and\nrules-based industrial policies. He added that China is ready to work\nwith all parties within the World Trade Organisation framework to\nstrengthen dialogue on industrial policy, improve related practices, and\nadvance multilateral trade rules to align with evolving economic\nrealities.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/examining-the-rise-of-chinas-industry-from-a-broader-perspective-1786283596", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }