China's Ministry of Commerce published its position on the so-called excess capacity issue on Tuesday, systematically refuting unfounded accusations regarding this concept.
Global Survey Results
According to a study conducted by CGTN among internet users worldwide, 81.7% of respondents oppose attempts by some countries to label 'excess capacity' in a broad sense to achieve geopolitical or protectionist goals and impose such claims on other states. Participants criticized the politicization of trade and economic issues, as well as the tendency toward excessive generalization of national security problems.
Economic Principles and Market
In the opinion of those surveyed, the narrative of 'excess capacity' contradicts fundamental economic principles, and such an argument cannot conceal the decline in competitiveness of certain industries. 87% of respondents stated that in a market economy, the equilibrium of supply and demand is relative, and imbalance is the norm, meaning there is no constantly optimal level of production capacity. Furthermore, 84.7% believe that reasonable ranges for capacity utilization differ across various economies, and there is no single global standard for assessment.
Application of the Term 'Excess Capacity'
In recent years, the economic concept of 'excess capacity' has become increasingly generalized and incorrectly applied. Some countries have stopped assessing industrial development based on changes in market supply and demand. Instead, they attribute the competitive pressure of their domestic companies, trade deficits, and even adjustments in industrial policy to so-called 'China's excess capacity,' using it as a pretext for imposing trade barriers.
Trade Balance and Protectionism
76% of respondents noted that a trade surplus is the result of the cumulative effect of global division of labor and the structure of supply and demand, not a sign of excess capacity. Moreover, 81% of participants believe that various protectionist measures undermine global economic growth, seriously disrupt normal trade flows and the world trade order, hindering the rational distribution of production capacity globally.
Industrial Support and International Norms
Several UNCTAD reports indicate a rapid rise in industrial policies worldwide over the past five years. Providing subsidies for research and development, tax incentives, and low-interest loans for developing industries has become common international practice. China consistently adheres to WTO rules and continues to build and improve its industrial support system in line with international practices, ensuring that subsidies are increasingly directed towards technological innovation, the green agenda, and public interests, rather than undermining market competition.
Role of Subsidies and Economic Leadership
In response, 80.6% of respondents stated that sensible industrial subsidy policies can help correct market failures, promote technological innovation, protect the environment, reduce poverty, and foster balanced development. Nevertheless, 84.5% believe that the industrial policies of major economies exert significant influence and set an example, and it is these economies that should lead the fight against the abuse of subsidies and discriminatory subsidy policies. Another 81.5% of respondents noted that WTO members generally strive for fair, universal, and transparent subsidization practices, and that major economies must set an example by ensuring subsidy compliance.
Survey Methodology
The survey was conducted on CGTN's English, Spanish, French, Arabic, and Russian platforms, involving 3,703 internet users who shared their opinions within 24 hours.
