The following is a government position paper published by the Ministry of Commerce of the People’s Republic of China (MOFCOM), an agency of the Government of the People’s Republic of China.
Foreword
Providing strong dynamism for world economic growth, economic globalization is an unstoppable and overwhelming historical trend that promotes the flow of goods and capital, progress of science and technology and civilization, and exchanges among nations. As an important dimension to economic globalization, industrial cooperation is a key pathway to continuous global economic recovery and common development shared by all.
In recent years, international economic and trade landscape has gone through profound shifts with major-country rivalry intensifying and global industrial and supply chains reshaping quickly. With growing concerns about their industrial competitiveness and market positions, some countries and economies have politicized economic and trade issues. Hyping the so-called excess capacity of China, they accuse the country of flooding the world market with Chinese capacity and have used this as an excuse to ramp up restrictions on China, stoking up protectionism.
It has been China’s belief all along that the capacity issue requires a rounded, objective and just approach that combines historical perspective with dialectics to address contradictions and differences together in the spirit of openness, cooperation, mutual benefit and win-win outcome. Invoking protectionism will only serve to disrupt global economic and trade order and undermine the security and stability of global industrial and supply chains and the sound and orderly development of industrial cooperation, which spell long-term risks for world economic growth.
To clarify related facts, this document is hereby published to lay out China’s policy position on issues related to the so-called excess capacity.
I. Global capacity and the so-called excess capacity should be viewed in a rounded and objective manner
A. The evolving global capacity landscape is the result of international industrial labor division and cooperation.
History of the evolving global capacity landscape. Since the first industrial revolution, continuously improving productivity and deepening economic globalization have accelerated the flow of various factors of production worldwide. As global centers of production and demand shift among countries and regions, industrial capacity also moves from country to country and region to region, which changes the shares of major economies in global industrial output. In1880, the UK’s share in global industrial output peaked at 22.9%. Around the First World War, the U.S. succeeded the UK as the world’s industrial center, accounting for as much as 44.7% of the global industrial output in 1953.
Gradual shift in the global industrial landscape after the Second World War from a single center to multiple centers. As economic globalization gathers pace, international division of labor keeps deepening with several waves of global industrial transfer first from the U.S. to Europe, then from the U.S. and Europe to Japan, and on to East Asia and China, as well as the current movement of some industries from China to Southeast Asia and other regions, which has formed three
regional manufacturing centers in North America, Europe and East Asia with their manufacturing value-added respectively accounting for 17%, 17% and 38% of the global total. It is by actively integrating into economic globalization and taking part in international labor division that China has become“the workshop of the world” and a key component of the global manufacturing network.
To read the full press release as it was published by The Ministry of Commerce of the People’s Republic of China, please click here.
China’s Position on the So-called Excess Capacity Issue