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China Faces Manufacturing Overcapacity Challenges: IMF


overcapacity in manufacturing sector in China
China

China: The International Monetary Fund (IMF) has raised concerns about overcapacity in manufacturing sector in China, despite a generally improved economic outlook. The issue, which last surfaced significantly in 2014-2016, has re-emerged due to supply-demand imbalances exacerbated by the COVID-19 pandemic and a struggling property sector. Chinese companies are producing more than domestic consumption can absorb, resulting in surpluses and low factory utilization rates across various industries. Emerging sectors like electric vehicles and clean technology are also contributing to this overcapacity. Protectionist measures against Chinese goods are increasing globally, with tariffs and duties being imposed by the US, EU, and some Asian countries to counteract perceived unfair trade practices. 


Source:  CEOWORLD Magazine 

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