Understanding Overcapacity
• Definition: Overcapacity occurs when a country’s production capabilities exceed the domestic demand for its products, leading to an excess that needs to be exported.
• Chinese Overcapacity: China has built up significant production capabilities in various sectors, leading to a surplus of goods such as electric vehicles (EVs), metals, chemicals, and consumer goods. This surplus is then exported, often at low prices, flooding global markets and affec...
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