LONDON: For years, Beijing dismissed Western concerns about Chinese overcapacity as protectionist rhetoric. When the United States and European Union complained about cheap Chinese exports flooding global markets, China’s response was predictable: These were simply competitive advantages in a free market economy.
That narrative has now fundamentally shifted. In a remarkable policy U-turn, China has not only started acknowledging the overcapacity problem but is treating it as a national priority that requires urgent intervention.
While there have been signs of this narrative change for a while, the clearest signal of this messaging transformation came through recently on China’s own policy channels.
In July, the Communist Party’s leading journal Qiushi warned that “disorderly competition has destroyed entire industry ecology”. This wasn’t diplomatic language about market dynamics – it was an admission that destructive competition had reached crisis proportions.
Around the same time, President Xi Jinping chaired a meeting of the Central Financial and Economic Affairs Commission, calling for “low-price competition to be regulated” and outdated production capacity to be “phased out in an orderly manner.”
Weeks later, the State Council explicitly linked “irrational competition” to weak domestic economic circulation, naming high-profile sectors like new energy vehicles as targets for immediate oversight.
https://www.channelnewsasia.com/commentary/china-economy-price-wars-overcapacity-ev-unfair-practices-manufacturing-5264731
