On July 28, China's Ministry of Commerce issued a document on the so-called " China has always believed that when looking at the issue of production capacity, we should adhere to a comprehensive, objective and fair attitude, look at it both historically and dialectically, uphold open cooperation, mutual benefit and win-win situation, and jointly resolve contradictions and differences. Protectionism will only disrupt the global economic and trade order, undermine the security and stability of the global production and supply chain and the healthy and orderly development of industrial cooperation, and bring long-term risks to world economic growth. The original text is as follows: China's Position on the So-called "Overcapacity" Issue (July 2026) Ministry of Commerce of the People's Republic of China Contents Preface I. A comprehensive and objective view of global capacity and the so-called "excess" (1) The global capacity pattern continues to evolve. It is the result of international industrial division and cooperation (2) Objective understanding of the phenomenon of "overcapacity" in global economic development (3) The situation of "overcapacity" in different economies and industries should be measured according to different stages and levels of development. (1) The relationship between industrial subsidies and overcapacity (2) The relationship between trade surplus and overcapacity (3) The relationship between economic imbalance and overcapacity (4) The relationship between market competition and overcapacity Relationship III. China insists on building a modern industrial system in the process of opening up and cooperation. (1) The rapid development of China's modern industry is driven by innovation. (2) The stable and healthy operation of China's industry depends on the continuous deepening of reform . (3) The development of China's modern industry is not a "China shock" to the world. Industrial cooperation is an important part of economic globalization and an important path to promote the sustained recovery of the global economy and the common development of all countries. In recent years, the international economic and trade pattern has evolved profoundly, the competition among big powers has intensified, and the global industrial chain and supply chain have been reshaped at an accelerated pace. Relevant countries and economies are increasingly concerned about their own industrial competitiveness and market position, politicizing economic and trade issues, hyping up the so-called "overcapacity" problem in China, accusing China's production capacity of impacting the world market, and using this as an excuse to continuously increase restrictive measures against China, and intensifying protectionism. China has always believed that when looking at the issue of production capacity, we should adhere to a comprehensive, objective and fair attitude, look at it both historically and dialectically, uphold open cooperation, mutual benefit and win-win situation, and jointly resolve contradictions and differences. Protectionism will only disrupt the global economic and trade order, undermine the security and stability of the global production and supply chain and the healthy and orderly development of industrial cooperation, and bring long-term risks to world economic growth. In order to clarify the relevant facts and clarify China's policy position on the so-called "overcapacity", this document is hereby issued. 1. A comprehensive and objective view of global capacity and the so-called "surplus" (1) The sustained development and evolution of the global capacity pattern is the result of international industrial division and cooperation. The historical evolution of the global capacity structure. Since the First Industrial Revolution, with the continuous development of productivity and the deepening of economic globalization, various factors of production have accelerated their flow around the world. The center of global output and demand will not be fixed in a certain country or region. The distribution of industrial capacity among different countries and regions has been changing, and the global share of industrial output of major economies has also changed. In 1880, Britain's industrial output accounted for 22% of the world's total. Before and after World War I, the United States became the world's industrial center after Britain. In 1953, its industrial output accounted for 44% of the world's total. After World War II, the global industrial structure gradually moved from a single center to a multi-center. With the rapid development of economic globalization and the deepening of international division of labor, the world has experienced many rounds of industrial transfer, from the United States to Europe, from Europe and the United States to Japan, to East Asia, to China, and the current transfer of some Chinese industries to Southeast Asia and other regions, forming three major regions of North America, Europe and East Asia. The added value of the three manufacturing industries accounted for 17%, 17% and 38% of the world respectively. China's becoming a "world factory" is the result of actively integrating into economic globalization and participating in international industrial division of labor, and is also an important part of the global manufacturing network. (2) Objectively understand the phenomenon of "overcapacity" in global economic development. "Overcapacity" is a dynamic phenomenon in market economy. Under the market economy, the supply and demand of production capacity is always in the dynamic cycle of "balance-unbalance-rebalance", and there is no lasting balanced state of production capacity. Whether there is excess capacity depends on the relationship between supply and demand, which is dynamically adjusted in the industrial life cycle, the balance between supply and demand is relative, and the imbalance is universal. In the era of globalization, the increase and decrease of international production capacity and the change of global supply and demand are also interrelated. In the process of technological change, new production capacity creates new supply, while old production capacity is redundant, resulting in a phased and structural imbalance between supply and demand. After the adjustment of market mechanism, the supply and demand pattern converges to a new equilibrium state. There are different understandings of the concept of "overcapacity", and there is no broad consensus in the world. The issue of "overcapacity" has been controversial, and no official definition has been made by major international organizations. There is no definition of "excess capacity" in the World Trade Organization (WTO) agreement, nor is there a provision for "excess capacity". The International Monetary Fund (IMF) believes that "overcapacity" is a complex concept that needs to be understood in the context of macroeconomic scenarios. Economists mostly describe "overcapacity" from the macro and micro dimensions, believing that from the macro level, it is used to describe the phenomenon that the production capacity of the whole industry significantly exceeds the total effective market demand; from the micro level, it is the state that the actual output of enterprises does not reach the optimal output due to market monopoly competition. In the economic practice of various countries, due to the fluctuation of economic cycle, the state that the production capacity of products in the market exceeds the effective demand is widespread. Different countries and industries have different criteria and perspectives for judging the economic phenomenon of overcapacity. Some economies, motivated by geopolitics, trade protectionism or other specific purposes, have concocted various new standards to define the so-called "excess capacity" in a simple, mechanical or generalized way in an attempt to impose it on others. These so-called concepts and standards do not conform to the law of development, nor do they conform to the reality of various countries. (3) The situation of "overcapacity" in different economies and industries should be measured according to different stages and levels of development. Capacity utilization index is often used to measure the situation of "excess capacity", but it needs to be treated differently according to the actual situation of each country. In economics, capacity utilization rate refers to the ratio of actual output to potential output. Different economies have different reasonable ranges of capacity utilization rate, and there is no universal judgment standard. Data from relevant institutions show that the median capacity utilization rate of developed and fast-growing economies is between 75% and 80%, while that of less developed countries is generally between 50% and 64%. This is due to the constraints of infrastructure, capital and other factors in less developed countries, resulting in the capacity can not be fully released. The capacity utilization rate of different industries is quite different. According to the latest data on capacity utilization of 725 industries published by 27 EU member States, 169 of them are below 70%. The capacity utilization rate of some traditional industries is significantly lower than average level. For example, in some countries, the capacity utilization rate of beverage, furniture and other industries is about 65%, while that of rubber, chemical, plastic and other industries is only 40%-50%. According to the latest data from the Federal Reserve, the capacity utilization rate of manufacturing industry in the United States is 75.7%, but there is a big difference in different industries, with computers and peripheral equipment reaching 83. From the economic practice of various countries, the capacity utilization rate is used to measure the use of capacity objectively, but it can not be used to absolutely judge whether there is overcapacity in different economies and industries. 2. Views and positions on the four relationships related to "overcapacity" (1) The relationship between industrial subsidies and overcapacity. There is no necessary link between industrial subsidies and overcapacity. Reasonable industrial subsidy policy helps to correct market failure, promote technological innovation, environmental protection, poverty reduction and balanced development, and will not cause so-called "overcapacity". Many countries will adopt industrial policies with different emphasis according to their own national conditions and industrial development needs, such as providing R & D subsidies for emerging industries and risk subsidies for agriculture, which are also legitimate industrial and trade policy tools for WTO members. Several UNCTAD reports have pointed out that the number of global industrial policies has increased rapidly in the past five years, and it has become an international practice to provide R & D subsidies, tax incentives and low-interest loans for emerging industries. WTO members generally pursue fair, inclusive and transparent subsidies, and big countries should set an example in subsidy compliance. Subsidies are not a problem in themselves, but they should be used reasonably under the WTO principles of openness, fairness and compliance. Big countries are the leaders of global industrial development, and industrial policies also have strong spillover and demonstration effects, so they should take the lead in opposing the abuse of subsidies and the adoption of discriminatory subsidy policies. The Inflation Reduction Act of the United States plans to provide $750 billion in subsidies from 2022 to 2031, in which subsidized electric vehicle need to meet the conditions of local or North American production and sales, excluding other WTO members. The United States subsidizes the industry in the field of artificial intelligence far more than any other country. According to incomplete statistics, the European Commission will provide more than 1 in 2021-2030. The EU Industrial Accelerator Act directly links local content with financial support through the "EU origin" requirement.All countries should focus on making the cake of global development bigger and introduce industrial policies, including subsidies, in a reasonable and compliant manner, rather than using them as a tool to restrict the development of others. China is willing to discuss subsidy policies with all parties within the framework of the WTO and jointly standardize relevant practices. China has always strictly abided by WTO rules and is committed to establishing and improving a subsidy system in line with international practices. Over the years, China has constantly standardized and improved relevant policies in terms of the compliance, scientificity and transparency of subsidies, cleaned up and standardized some non-standard practices in some places, and established a unified negative list management mechanism for local financial subsidies. The Chinese government has earnestly fulfilled its transparency obligations in a timely and comprehensive manner, and the latest issue of the Chinese government's 2023-2024 central and local subsidy policy circular submitted in June 2025 has achieved nationwide coverage. China's subsidies are equally applicable to all kinds of market operators, mainly in scientific and technological research and development, technological industrialization, market consumption and other links. We will adopt more market-oriented and guiding indirect means such as public services, technical standards and skills training, and focus on supporting technological R & D and innovation, the development of small and medium-sized enterprises, and green energy conservation. For example, in the process of replacing old consumer goods with new ones, we should adhere to internal and external consistency, treat the subsidy policies of replacing old automobiles and household appliances with new ones, and purchasing new digital and intelligent products equally, and foreign-funded enterprises should actively participate in and benefit equally. (2) The relationship between trade surplus and overcapacity. Large exports and surplus are not equal to overcapacity. The surplus mainly reflects the difference between total domestic savings and total investment, mainly including the surplus of trade in goods and services. From the perspective of the history of global economic development, manufacturing powers such as Britain, the United States, Japan and Germany have maintained surpluses for a long time, and it is also common for Germany and Japan to have a current account surplus of more than 6% of GDP. Emerging market exports have grown rapidly, Indonesia and Mexico have also become surplus countries, and Brazil and Vietnam have achieved trade surpluses for 10 consecutive years. From the perspective of industry products, 80% of American chips are exported, and about two-thirds of Boeing's commercial aircraft are sold to customers outside North America. The EU's automobile, pharmaceutical and cosmetics surpluses in 2025 were 92.2 billion, 214.6 billion and 11.6 billion US dollars, respectively. If we follow the logic that a large surplus will inevitably lead to overcapacity, should these industries and products with large exports and large surpluses also be regarded as "overcapacity"? China has never deliberately pursued a trade surplus. China's export growth stems not only from the improvement of economies of scale and innovation capacity, but also from the needs of green transformation and industrialization development in various countries. For example, China's export growth to Europe is mainly concentrated in photovoltaic, new energy vehicles, lithium batteries and chemical products, which more reflects the demand for energy products driven by green transformation, and the energy crisis has raised the production costs of European chemical industries. China has never deliberately pursued the export share of labor-intensive products, and the export proportion of related products has dropped from 20.7% in 2012 to 15% in 2025. From the perspective of trade benefit distribution, "the surplus is in China, and the interests are in all parties". In 2025, foreign-funded enterprises accounted for 27% of China's exports and 16% of the surplus, and the growth rate of surplus and profit was faster than that of local enterprises. From the perspective of the overall balance of payments, although China has a large surplus in trade in goods, it has a deficit in trade in services and investment income. Overall, the current account surplus accounts for about 3 % of GDP. China actively promotes balanced development of imports and exports. China has been the second largest importer in the world for 17 consecutive years, and has become the main export destination for nearly 80 countries. China has implemented a zero-tariff policy for 63 countries, and is the first major economy in the world to achieve zero-tariff treatment for all African countries and least developed countries with diplomatic relations; It is the only country to hold international Import Expo, and has successfully held eight sessions, with a cumulative turnover of more than 580 billion US dollars. China is launching a series of "Export to China" activities, continuing to increase "Buy the World" efforts, and supporting more high-quality products and services from around the world to enter China. During the 14th Five-Year Plan period, China's cumulative imports exceeded 90 trillion yuan, fully demonstrating that China is not only a "world factory", but also a "world market". At present, unilateralism and protectionism are on the rise, and various trade protectionist measures are restraining global economic growth, seriously interfering with normal trade exchanges and trade order, and undermining the rational flow and distribution of global production capacity. It is necessary for all parties, especially major trading countries, to meet each other halfway, safeguard free trade, do more to facilitate smooth and convenient trade, do less to build walls and barriers, promote balanced and sustainable development of global trade, and promote stable and smooth global production and supply chains. (3) The relationship between economic imbalance and overcapacity. Global economic imbalance is a historical norm with complex root causes. Under the international division of labor system and economic and financial order formed after World War II, the global economy will enter a round of imbalance risk accumulation and release every 10 years, and even trigger the global economic and financial crisis. In terms of analyzing the causes of global economic imbalances, the focus of international discussion has been changing, including market factors such as savings and investment structure, division of labor in the production and supply chain, as well as institutional factors such as the international financial system and macro-policy resonance. In recent years, global imbalances have taken on new features. The International Monetary Fund and other institutions believe that macroeconomic policies, especially fiscal policies, have played a key role in causing global imbalances. The United States has accumulated a huge debt imbalance and needs to improve its fiscal situation. Europe has insufficient investment and needs to improve productivity. China needs to expand domestic demand. These views also reflect the systemic and complex nature of global imbalances. Some views linking global imbalances with "overcapacity" and simple attribution deliberately confuse concepts, have logical misunderstandings, and even have ulterior motives. "China's insufficient domestic demand leads to overcapacity" is not true. China is not only a big manufacturing country, but also a big consumer. Domestic demand has always been the main engine of China's economy, contributing an average of 93% to China's economic growth from 2013 to 2024. Among them, the average contribution rate of consumption and investment is 55% and 38% respectively. China's total retail sales of consumer goods increased from 23.8 trillion yuan in 2013 to 50 in 2025. According to the purchasing power parity of the World Bank, China's total retail sales of consumer goods in 2025 is equivalent to 1 of the United States. At present, China's physical consumption is the largest in the world, and the per capita annual consumption of some industrial products is close to the level of developed countries. In recent years, the growth rate of China's total social zero has slowed down, which is in line with the transition of China's economy from high-speed growth to high-quality development, and also reflects the trend of upgrading China's consumption structure. Commodity consumption is relatively stable, service consumption is developing rapidly, and per capita service consumption expenditure has increased annually in the past five years. The argument that "insufficient domestic demand in China leads to overcapacity" is to change the concept stealthily and apply the micro-phenomenon of the market to the macro-structure level. China continues to expand domestic demand and is committed to a higher level of supply and demand balance. Strong domestic market is the strategic support of Chinese-style modernization. Domestic demand includes investment demand and consumption demand. The Outline of the Fifteenth Five-Year Plan of China has made a special plan for building a strong domestic market, emphasizing that we should adhere to the strategic basis of expanding domestic demand, expand effective investment, carry out in-depth special actions to boost consumption, promote the expansion and upgrading of commodity consumption, release the potential of service consumption, consolidate the consumption base of residents, continuously improve the consumption environment, and create new demand. Create new demand with new supply, and promote positive interaction between consumption and investment, supply and demand. In the next decade or so, the middle-income group will exceed 800 million, and the per capita GDP will reach the level of moderately developed countries. With huge consumption space and great potential and vitality, it will remain the main engine of China's economic development and will continue to inject strong momentum into world economic growth. (4) The relationship between market competition and overcapacity. Competition is an important guarantee to promote the optimization and regulation of production capacity and the healthy development of industry. Every industrial and technological revolution is accompanied by the process of increasing production capacity or even "excess", market competition to promote technological upgrading and industrial iteration. In order to pursue profits and market share, enterprises will invest in expanding production, and then through market regulation, promote enterprises to reduce costs and increase efficiency, and bring about technological progress and efficiency improvement. Market competition itself is the most effective mechanism to prevent the disorderly expansion of production capacity, otherwise it will be unsalable, loss-making and eliminated by the market. The role of the government should be to maintain competition order and a fair environment, so that the market can play a more full role, so that backward production capacity can naturally withdraw from the competition. All parties should maintain fair competition and reduce undue interference in the division of labor and cooperation of global production capacity. The principle of fair competition and related rules of the WTO are the most widely accepted norms of conduct in the world. In recent years, some economies have placed their own countries above international rules, violated the principle of fair competition, and even used unfair means in the name of fair competition and protectionism. The United States has imposed illegal tariff measures, adopted targeted investment restrictions, abused export controls and sanctions, and seriously undermined fair competition. The EU has adopted a series of economic and trade legislation and measures, such as the Industrial Accelerator Act, which imposes restrictive requirements on foreign investment in batteries, electric vehicle, photovoltaics and key raw materials, which constitute serious investment barriers. Accusing China of "unfair competition" and "non-market policy practices" is a typical "double standard", which is the real unfairness. China firmly upholds the basic principles of the WTO, firmly promotes fair competition, and promotes mutual benefit and win-win results. China has announced that it will not seek new special and differential treatment in current and future WTO negotiations. WTO Director-General Iweala pointed out that China's decision reflects its commitment to a more balanced and fairer global trading system. China actively creates a first-class business environment for fair competition. The number of Chinese market operators has exceeded 200 million, ranking first in the world. Massive market operators create a fully competitive environment, where enterprises face challenges and compete for strength, polishing products and optimizing services in the process of survival of the fittest. McKinsey said that China is "the most hardcore gym in the world", honing highly competitive enterprises, and there is no "another China" in the world today. The Outline of China's Tenth Five-Year Plan clearly States that we should further promote the construction of a unified national market, eliminate barriers to factor acquisition, qualification recognition, bidding and government procurement, fully implement national treatment for foreign-funded enterprises, comprehensively rectify "involution" competition, create a market-oriented, legalized and internationalized first-class business environment, and maintain a fair competitive market order. According to the 2026 China Business Environment Survey of the US-China Business Council, 92% of the US companies surveyed will be profitable in China in 2025. According to the 2026 Business Confidence Survey released by the European Chamber of Commerce in China, 75% of enterprises believe that their production efficiency in China is higher than that in other parts of the world. 3. China insists on building a modern industrial system in open cooperation (1) The rapid development of China's modern industry is driven by innovation. China adheres to innovation-driven, and has found an effective way to lead industrial innovation with scientific and technological innovation and promote scientific and technological iteration with industrial upgrading. Innovation-driven development is China's major national strategy and the key password for China's long-term economic development. During the 14th Five-Year Plan period, the R & D expenditure of the whole society increased by 10% annually, the second largest in the world, and the proportion of basic research expenditure exceeded 7% in 2025, a record high. Many industries have made technological breakthroughs and taken the lead in overcoming difficulties through long-term, high-investment research and development. This is the key to the competitiveness of Chinese products, not government subsidies. In recent years, China's new energy, intelligent network automobile and other industries have developed vigorously, behind which are breakthroughs in new materials, power batteries, communications and other technologies. Since more than 20 years ago, China's new energy automobile enterprises have continued to invest in R & D and industrial layout, forming unique technological advantages. The energy density of power batteries has increased by more than 50% and the production cost has decreased by more than 60% compared with 2018. The Morgan Stanley report shows that the focus of China's electric vehicle industry has shifted from price advantage to technological advantage, and artificial intelligence applications such as intelligent driving systems have further consolidated its industrial advantages. China insists on innovation and empowerment, and the green and intellectual content of traditional industries has been significantly improved. China supports enterprises to optimize and upgrade their industries with digital and green technologies, and to promote high-end, intelligent and green development. In recent years, the green content of the industry has continued to increase, with more than 8000 national green factories, more than 600 green industrial parks and half of the electricity used by 246 national green data centers being green electricity. The proportion of industrial enterprises above designated size carrying out digital transformation reached 89.6%, and the penetration rate of digital equipment reached 57. There are 109 lighthouse factories in China, accounting for nearly half of the world's total. China strengthens innovative applications and continues to create massive "training grounds" for new industries and new tracks. China has a complete industrial system, and any valuable scientific and technological achievements can be quickly transformed into actual products with the support of Made-in-China. From the one-hour innovation circle of electronic information in the Yangtze River Delta region to the half-hour supporting circle of Shenzhen Robot Valley, to the highly developed new energy industry circle, the electric vehicle factory can solve the supply of supporting parts within four hours'drive. China has a super-large-scale market with a population of more than 1.4 billion, and new formats, new models and new scenarios are constantly emerging, which can provide the best testing ground for "0 to 1" verification and "1 to N" volume for all kinds of new products and services. The rise of export "new three" (new energy vehicles, lithium batteries, photovoltaic products) and information consumption "new three" (intelligent network new energy vehicles, smart phones and computers, intelligent robots) industries is closely related to a large number of application scenarios. (2) China's industrial operation has always been stable and healthy, relying on the continuous deepening of reform. China has continued to push forward the supply-side structural reform, and the utilization rate of industrial capacity has remained within a reasonable range. In recent years, China has continuously improved the utilization of industrial capacity through measures such as eliminating backward production capacity in the supply-side structural reform, and the overall supply and demand are basically balanced and the operation situation is stable. In 2025, the utilization rate of industrial capacity above the scale of China is 74. From the perspective of subdivision, the average utilization rate of general equipment manufacturing capacity in the past three years is 78.9%, that of electrical machinery and equipment manufacturing is 74.8%, that of automobile manufacturing is 73.3%, and that of computer, communication and other electronic equipment manufacturing is 76. It is mainly the adaptive adjustment brought about by structural adjustment and green transformation, which belongs to the normal phenomenon in the process of industrial upgrading. China has continuously improved the system and mechanism of market-oriented allocation of factors and created a good ecological environment for industrial development. In recent years, China has continuously increased the guarantee of resource elements, built a diversified investment system led by enterprises, guided by the government and participated by the society, built a number of major scientific research facilities and infrastructure, and trained about 7 million graduates from universities of science, engineering, agriculture and medicine every year. China has deepened the reform of the system and mechanism, and launched a series of new policies and measures in the areas of intellectual property protection, risk sharing and innovation incentives. China has continuously optimized the system and mechanism of factor guarantee in new industries and new fields, accelerated the construction of new infrastructure such as new power grids, computing networks and new generation communication networks, effectively removed barriers and obstacles hindering the optimal allocation of resources, further improved total factor productivity, accelerated the transformation of new and old kinetic energy, and promoted the healthy and sustainable development of the industry. (3) China's modern industrial development is not "China's impact 2.0" but "China's opportunity" to the world. 2. The United States and other Western countries falsely claim that China's industrial development threatens the monopoly position of Western countries, squeezes the development space of southern countries, and throws out the so-called "China's impact". 2. This is not true and untenable. Over the past decade and more, China's contribution to global economic growth has been maintained at around 30%, and it is an important engine of world economic growth. In the past, China mainly provided "market dividends" to the world with its own large-scale market and low-cost factors. Now, while providing greater "market dividends", China has played a stabilizing anchor and an important pivotal role in global industrial cooperation through industrial development, creating "development dividends". It also provides more and more "innovation dividends" for the world through scientific and technological progress. The combination of these dividends has brought more development opportunities and greater development space to the world, which is also the "China opportunity" mentioned more and more by the international community. 2. It is embodied in four aspects: promoting global innovation cooperation and scientific and technological progress. Many innovations, such as artificial intelligence models, follow the open source route, so that more countries, especially developing countries, can use and afford new technologies and enhance their development capacity. The total number of global downloads of China's AI open source model has exceeded 10 billion, and large scientific devices such as controllable nuclear fusion and quantum technology are open to the world. The fast-growing Chinese innovative enterprises have also brought several times or even tens of times of returns to investors from all over the world. Enterprises in China can quickly find partners in the whole process from R & D, trial production to mass production, making innovation more efficient, not only succeeding in the Chinese market, but also enhancing their competitiveness in the global market. Facts have strongly proved that China's emerging technologies and products bring the world not shocks but opportunities, not threats but empowerment. Accelerate the global green and low-carbon transformation. Climate change is a global challenge, and achieving green and low-carbon transformation is the common aspiration and development needs of all countries. China's high-quality new energy products have enriched the global supply, promoted the green and low-carbon process, and helped to achieve the goals of the Paris Agreement. International " will further enhance the well-being of the people of all countries. In recent years, the global economy has fallen into the dilemma of fatigue and high inflation. Chinese products with high quality, high efficiency and high cost performance have enriched the global supply, reduced the cost of living and alleviated the pressure of global inflation. China's textile and household products, consumer goods, smart terminals, household appliances, medical supplies and other products are exported to more than 200 countries and regions around the world, providing stable, reliable and diversified product choices for global consumers. Australian media reported that the phenomenon of Chinese goods curbing inflation has expanded from necessities to high-tech equipment such as solar panels, and consumers in the United States and Europe have enjoyed tremendous benefits. A report released by the European Central Bank estimates that if EU imports from China increase by 10% in 2026, the overall import price of the EU will fall. 1. Brazilian media reported that in the context of rising global costs, China has maintained relatively moderate inflation by virtue of its manufacturing system advantages, helping emerging markets, including Brazil, to ease inflationary pressures. Help developing countries industrialize. China's exports have lowered the threshold for developing countries to enter the manufacturing industry, providing high-quality and low-cost production equipment and spare parts for sewing machines, textile machinery and industrial machine tools. From 2012 to 2024, China exported more than 30 billion US dollars of textile machinery to developing countries, helping Vietnam, Pakistan and Bangladesh become important textile producers and exporters. China's imports have also created opportunities for the export of products from developing countries. From 2010 to 2025, China's imports of labor-intensive products from developing countries and least developed countries increased by 3. China's investment has upgraded the industrial production capacity of developing countries. China has set up more than 50000 enterprises abroad, with a stock of investment exceeding US $3 trillion, nearly 90% of which are distributed in developing economies. A large number of projects in light industry, textiles, household appliances and other fields have been launched, which has promoted the development of new fields such as digital and green, and helped many developing countries in Southeast Asia, the Middle East, Africa and other regions to rise from the edge of the supply chain to an important node of the global manufacturing network. 4. Jointly promote the construction of an open and inclusive global production and supply chain cooperation pattern (1) Promote mutual benefit and common development. Under the background of globalization, it is in the common interest of all countries to expand the "cake" of global development through mutually beneficial and pragmatic cooperation in the production and supply chain. Create new demand by industrial iteration. All parties should jointly seize the opportunities of the new round of industrial revolution and technological transformation, strengthen international cooperation in green low-carbon, artificial intelligence, bio-manufacturing and other fields, give full play to the advantages of cutting-edge and emerging industries with rapid growth and great potential, break the bottleneck of growth through sharing the dividends of science and technology, and provide new momentum and inject new vitality into the sustained recovery of the global economy. Promote balanced development and expand new space. All parties should pay more attention to the "real imbalance" between developed economies and developing economies, strengthen industrial, trade and investment cooperation, promote the integration of more developing countries and regions into the international division of labor system, accelerate the process of industrialization and modernization, promote economic development and market expansion, and provide a "new blue ocean" for global industrial cooperation. The cake of the world economy has become bigger, and the contradiction in the distribution of interests has become smaller. (Two) respect market rules and promote economic globalization. The global production and supply chain is the result of the joint action of market rules, enterprise development and scientific and technological progress, which is not formed overnight, and forced intervention will only be counterproductive. Insist on promoting the flow of factors through open accommodation. All parties should promote a virtuous circle in the global production and supply chain, promote trade and investment facilitation and liberalization, improve the efficiency of factor resource allocation, and prevent market segmentation, investment restrictions and barriers from blocking the production and supply chain. Adhere to complementary advantages, equality and mutual benefit, jointly create and maintain a global open and innovative ecosystem, so that international industrial cooperation can play a greater role. Oppose the politicization of economic issues and pan-security. It is a normal demand for countries to enhance the influence and resilience of their own industries through competition and cooperation, and they should not distort the underlying logic of the market for the rational flow of global resource elements through political interference. Expanding and politicizing "reducing dependence" and "eliminating risk" will only miss more development opportunities. All parties should respect the autonomy of investment decision-making and business layout of business entities, build a fair, stable and predictable business environment, and let enterprises return to the essence of the market and act in accordance with economic laws. (Three) strengthen industrial policy coordination and maintain a good environment for cooperation. Major economies have a deep participation and great influence in the global production and supply chain cooperation, and their industrial policies have spillover effects. We should strengthen communication and coordination, enhance mutual trust and play an exemplary role. Jointly promote the stable and smooth global production and supply chain. Major economies should adhere to equal consultation, properly manage differences, abandon unilateralism and protectionism, oppose discriminatory and exclusive practices, avoid closed restrictions and bottom-up competition, and create more obstacles and unstable factors for global industrial cooperation. The economic and trade restrictions imposed by Europe and the United States on China have seriously damaged mutual trust and cooperation between the two sides, as well as their own interests, and have had a negative impact on global economic development and industrial cooperation. Strengthen bilateral and multilateral industrial policy dialogue. All parties should rely on bilateral and multilateral platforms, improve the normal communication mechanism of industrial policies, adhere to openness and transparency, clarify policy objectives, and eliminate misunderstandings and respond to concerns through constructive dialogue. Under the framework of WTO, we should strengthen the transparency and exchange of subsidies, properly handle differences through equal consultation, submit subsidies notifications on time and actively respond to the concerns of members, and jointly create a stable and predictable institutional environment. (Four) expand market opening and create opportunities for cooperation. Openness brings progress, and closure is bound to lag behind. All parties should remove barriers, open wider to the outside world, constantly tap market potential and provide more space for industrial cooperation. Reduce trade barriers. The larger the scale of trade, the more difficult it is to avoid differences and frictions. Focusing only on "building walls" will only increase contradictions and will not help solve problems. All parties should adhere to open cooperation, facilitate the cross-border flow of domestic and foreign factors, promote full market competition, stimulate the vitality of enterprises, and constantly enrich new supply and create new demand. The result of closure can only be that the market has no source of living water, and innovation and development are more hindered. Reduce barriers to investment cooperation. Investment cooperation is an important way to make the cake bigger, tighten ties and enhance mutual benefit, which not only meets local needs, but also promotes the development of the host country. All parties should relax restrictions on access to investment fields, simplify procedures, remove barriers, provide a fair, transparent and predictable environment for foreign investors, and better protect the legitimate rights and interests of investors. We should not use foreign investment review regulations and foreign subsidy regulations as weapons to conduct discriminatory investigations and impose mandatory requirements on enterprises. (Five) adhere to multilateralism and build a more just and rational international economic order. Multilateralism is a valuable asset that human society has learned from the bitter lessons of the two world wars, and it needs to be cherished by the international community. Stick to the basic principles and rules of the WTO. The WTO rules system with fairness, transparency, non-discrimination and openness as its basic principles has been the cornerstone of maintaining the stable development of global economy and trade for many years. The concept of multilateral trade has been deeply rooted in the hearts of the people, and no one wants to return to the jungle era of the law of the jungle. All parties should keep pace with the times to promote WTO reform, revitalize the authority of the WTO, promote the updating of WTO rules, rebuild the trust of WTO members, adhere to the principle of most-favored-nation treatment, and work together to stabilize global trade under the multilateral framework and under the rules accepted by all parties, so as to protect the legitimate rights and interests of different economies in international economic and trade exchanges to the greatest extent. Promote a more just and reasonable global governance system. In economic and trade exchanges, all parties should adhere to equality and mutual benefit, respect each other's development stage and national conditions, and jointly resist bullying the small and the weak by the big and the strong, especially at the expense of harming the interests of a third country in exchange for peace with the powerful. All parties should adhere to genuine fair competition and strive to run faster instead of tripping others. We should not say one thing and do another, nor should we only allow ourselves to do it and not let others do it. We will give better play to the role of multilateral and regional cooperation mechanisms such as the G20, BRICS and APEC, jointly safeguard fairness and justice, and improve the global economic governance system. Conclusion The capacity problem is a normal phenomenon accompanied by industrial iteration, market fluctuation and division of labor in the process of world economic development. Countries should treat the so-called "disputes" over production capacity objectively and dialectically from a market perspective and a global perspective, proceed from economic laws, explore more cooperation rather than create confrontation, and work together to break through global supply and demand blockades, optimize global resource allocation, and promote the healthy and sustainable development of global industries. If the economies of different countries are connected, they will advance together; if they are closed, they will retreat. China's development is inseparable from the world, and the world's prosperity also needs China. China is ready to work with all parties to safeguard the global free trade system, maintain the stability and smoothness of the global industrial chain and supply chain, maintain an open and cooperative international environment, promote the global economy to develop in a more sustainable and inclusive direction, promote the common prosperity of the world, and let the fruits of development benefit the people of all countries.
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