BEIJING — China's Ministry of Commerce formally rejected international accusations of industrial overcapacity, releasing a position paper July 28. The document, titled "China's Position on the So-called Excess Capacity Issue," asserts that production imbalances stem from market dynamics and global industrial division.
The ministry's paper directly counters claims from Western countries that China's rapid industrial expansion and export volumes constitute unfair trade practices. It describes the global capacity landscape as a natural outcome of international industrial division and cooperation.
Commerce Ministry officials said definitions of overcapacity are not universally agreed upon and can be subjective, pointing to differing interpretations of what constitutes excess industrial output.
Lin Weilong, director of the Policy Research Office at the Ministry of Commerce, said China's overall industrial capacity utilization remains within a reasonable range compared to international norms.
Lin said China's industrial capacity utilization among factories over a designated size registered 74.4 percent in 2025, presenting the figure as evidence that the country's manufacturing sector operates within acceptable global benchmarks.
The ministry's rebuttal also pointed to a perceived double standard in the international discussion, noting that more than a fifth of factory capacity sits idle across Europe and the United States, yet officials and analysts in those regions do not typically characterize it as "excess capacity."
Western nations have frequently raised concerns that China's state-backed industries produce goods in volumes exceeding domestic demand, arguing this leads to artificial price suppression and undermines competing industries abroad.
Beijing views these claims as based on overly critical assumptions driven by a narrow response to China's swift industrial growth over recent decades.
The document calls for openness and objectivity in addressing capacity issues, urging international partners to consider the complexities of global supply chains and economic development, and advocates for dialogue based on facts rather than protectionist concerns.
The ministry's paper signals China's intent to firmly defend its economic model against external criticism.
