China’s Ministry of Commerce has issued a policy document rejecting allegations that the country suffers from industrial overcapacity, arguing instead that the rapid expansion of its manufacturing sector has been driven by innovation, market competition and continued economic reforms.
The document, titled “China’s Position on the So-called Excess Capacity Issue,” was released on Tuesday to clarify Beijing’s stance amid growing trade tensions and increasing scrutiny from major economies over Chinese exports.
According to the ministry, the paper aims to address what it described as misconceptions surrounding China’s manufacturing capabilities while explaining the country’s policy approach to industrial development.
The Ministry of Commerce said the rapid development of China’s modern industries has been fuelled by technological innovation, continuous research and development, and improvements in productivity rather than government subsidies or market distortions.
It added that the stable and healthy operation of Chinese industries has been supported by the country’s ongoing programme of economic reforms, which has encouraged greater market competition, industrial upgrading and efficiency improvements.
The ministry argued that China’s manufacturing competitiveness reflects years of investment in technology, infrastructure, skilled labour and supply-chain integration.
The release of the policy paper comes as the United States and several Western economies have increasingly accused China of creating industrial overcapacity in sectors such as electric vehicles (EVs), batteries, solar panels and steel.
Critics argue that large-scale production supported by state policies has enabled Chinese manufacturers to flood international markets with lower-priced products, creating competitive pressures for manufacturers in other countries.
China has consistently rejected those claims, maintaining that its industries have become globally competitive through innovation, economies of scale and efficient production rather than unfair trade practices.
The new paper forms part of Beijing’s broader effort to counter what it considers an inaccurate narrative surrounding its manufacturing sector and export performance.
The Ministry of Commerce also stressed that China’s industrial development has contributed significantly to global supply chains by providing affordable products, supporting the green energy transition and helping to stabilise international markets.
Chinese officials have repeatedly argued that differences in industrial competitiveness should be addressed through market competition rather than protectionist trade measures.
The document comes against the backdrop of escalating trade disputes, including higher tariffs imposed by several countries on Chinese-made products and ongoing investigations into Chinese manufacturing practices.
The publication of the position paper follows a series of trade actions by the United States and its allies aimed at reducing reliance on Chinese manufacturing in strategic industries.
Beijing has maintained that accusations of “excess capacity” are being used to justify protectionist measures that undermine global trade and disrupt international supply chains.
By issuing the policy document, China seeks to reinforce its position that its industrial growth reflects market demand, technological advancement and structural reforms, while reaffirming its commitment to maintaining an open and competitive manufacturing sector amid an increasingly challenging global trade environment.
