Beijing says ‘some countries’ politicize trade with overcapacity claims

Beijing on Tuesday accused some countries of politicizing economic and trade issues by making allegations of Chinese overcapacity in a policy paper outlining its stance on the issue.

The paper, released by China’s Commerce Ministry, said the global economic and trade landscape has undergone profound changes in recent years, with intensifying competition and the restructuring of global supply chains.

"Some countries and economies, concerned about their own industrial competitiveness and market position, have politicized economic and trade issues by promoting claims of Chinese 'overcapacity,'" it said.

The paper said the issue should be viewed objectively and fairly while upholding the principles of openness, cooperation and mutual benefit.

"Protectionism will only disrupt the global economic and trade order, undermine the security and stability of global supply chains and the healthy development of industrial cooperation, and pose long-term risks to global economic growth," it added.

Overcapacity is a "dynamic phenomenon" inherent in market economies, with varying interpretations across countries, the paper said, urging that capacity conditions be evaluated according to the respective development stages and levels of different economies and industries.

It said the shift from a single-center to a multi-center global industrial landscape is a natural outcome of the international division of labor and that China’s emergence as the "world's factory" resulted from its integration into economic globalization and global supply chains.

The paper also outlined China’s position on the relationship between overcapacity and industrial subsidies, trade surpluses, economic imbalances and market competition.

It argued that industrial subsidies do not inherently lead to overcapacity, trade surpluses are not necessarily evidence of overcapacity, global economic imbalances have complex historical causes, and market competition is essential for optimizing production capacity and supporting healthy industrial development.

Beijing also called for creating new demand through industrial upgrading, maintaining open markets, safeguarding stable global industrial and supply chains, opposing the politicization of economic issues, reducing trade and investment barriers, defending World Trade Organization rules and making global economic governance fairer.