China Issues Document Countering Claims of Excess Production Capacity

On July 28, the Ministry of Commerce of the People’s Republic of China released a position paper addressing the issue of alleged excess production capacity. The document argues that concerns raised by some countries and economic blocs about China’s competitive advantage and market share are politicised and that there is no inherent link between subsidies and excess capacity.

It emphasizes that higher Chinese exports stem from the country’s large economic size, productive capabilities and growing global demand for green transition and industrialisation, not from any hidden surplus. The paper stresses that China is both a major manufacturing hub and a sizable consumer market, rejecting the notion of a new “China Shock”. It calls for major economies to lead rule‑based trade frameworks and for all parties to pursue mutual benefit and an inclusive, fair global supply‑chain system.