China hits back at criticism over excess industrial capacity as more US tariffs loom - AP News

What the report says

The Associated Press reported that China on Tuesday rejected accusations that its large trade surplus is the result of excessive industrial capacity, as Beijing awaited the outcome of a U.S. investigation that could lead to additional tariffs. China’s Ministry of Commerce issued a report defending the country’s manufacturing sector and arguing that its production benefits global markets rather than threatening them.

The dispute centers on fast-growing Chinese output in sectors such as electric vehicles, solar panels, cement and steel. AP noted that China’s exports have risen as domestic demand has weakened, helping push the country’s trade surplus to nearly $1.2 trillion last year. The ministry said China does not seek a large surplus and criticized what it described as a renewed “China shock” narrative from the United States and other Western countries.

Chinese Premier Li Qiang also addressed the issue at the World Economic Forum’s “Summer Davos” meeting in Dalian, framing China’s industrial strength as an opportunity rather than a threat. Separately, Lin Weilong, a Commerce Ministry policy research official, told reporters in Beijing that Washington should not define production beyond domestic demand as overcapacity or use that as grounds for trade restrictions.

The issue matters because China’s manufacturing scale has become a major source of tension with trading partners. AP reported that the U.S. is expected to release findings from a review of 16 economies, including China, and that the inquiry is widely expected to bring higher tariffs for some countries. The European Union has also recently moved to protect parts of its market, including steel, amid concerns over trade imbalances with China.