Pakistani media: The world's demand for Chinese products continues to grow
Pakistan's Forum Express article on August 8th, original title: China's "overcapacity theory": fallacy or reality?
With the growth of global demand, China's industrial advantage is promoting the supply of goods rather than manufacturing surplus.
The debate surrounding the so-called "overcapacity" in China is not so much an analysis of economic imbalances as a narrative deliberately shaped by geopolitical competition and trade protectionism. The statement of 'overcapacity' is based on the assumption that the goods produced by China's manufacturing industry far exceed the consumption demand of the global market. However, the analysis of market and demand trends reveals a completely different reality: China's industrial capacity is not overcapacity, but rather responsive, competitive, and increasingly indispensable.
The concept of 'overcapacity' is usually based on clear economic indicators, such as long-term underutilization of production facilities, excessive inventory, weak profitability, and insufficient demand. According to these standards, China's industrial sector has not experienced systematic overcapacity. According to data from the Chinese Ministry of Commerce, the industrial capacity utilization rate is expected to be around 74.4% by 2025, which is reasonable for a large economy. In the field of high-tech manufacturing, the utilization rate of production capacity is even higher. At the same time, the lower capacity utilization rate in traditional industries reflects structural adjustments made during China's green transformation process, rather than long-standing inefficiencies.
The market dynamics have also exposed the notion of 'overcapacity'. From household appliances to electric vehicles and renewable energy equipment, the world's demand for Chinese products continues to grow - not because they are forcibly pushed into the market, but because they are affordable, easy to obtain, and more importantly, of superior quality. In July, when a record breaking heatwave swept through most parts of Western Europe, Chinese made air conditioners became bestsellers. The surge in demand for air conditioning reveals a simple fact: production that meets real demand cannot and should not be described as' surplus'. Exceeding domestic demand for production capacity is not a problem in itself. In fact, this is the fundamental basis of international trade. As the "world factory", China has achieved the ability to produce on a large scale with its perfect industrial ecosystem and fully competitive domestic market.
Calling China 'overcapacity' is indeed biased. When Europe dominates the global market in industries such as automobiles, pharmaceuticals, and aviation, they are praised for their innovation and competitiveness. However, when Chinese manufacturing companies gain the same level of influence, they are attacked as' overcapacity '. This selective interpretation proves that the problem lies not in the production capacity itself, but in who controls this production capacity.
China's industrial strength stems from various structural advantages, including ample domestic competition, sustained technological innovation, economies of scale, and the world's most complete manufacturing supply chain. The combined effect of these factors enables Chinese enterprises to continuously improve efficiency, reduce costs, and enhance product quality. The resulting strong competitiveness is not an abnormal phenomenon, but the result of sustained industrial development in a market driven environment.
In the context of global energy transition, the world urgently needs affordable clean technologies, including solar panels, batteries, and electric vehicles. China has risen to become a leading supplier in these fields, greatly reducing the global cost of technology implementation. China does not set up barriers, but promotes deeper integration through investment, joint ventures, and collaborative research and development. For many developing countries, access to these technologies depends on their affordability. Restricting Chinese exports through tariffs or other barriers may drive up costs, slow down progress on climate action, and limit access to relevant technologies for the economies that need them the most.
Describing China's industrial strength as' overcapacity 'is a naive interpretation of complex and dynamic reality. China's production capacity is not a burden, but a key component of the global economy, ensuring the supply of basic commodities and supporting global development and innovation. As global demand continues to evolve, the focus should not be on reducing production capacity, but on ensuring effective utilization of capacity to seize opportunities and address common challenges. (Author Afchan Hussain, translated by Qiao Heng)