Effects of supply-side reform take time to be seen

The government is serious about cutting the country's overcapacity, yet seldom do people consider how difficult it is for China to press ahead with supply-side reform at a time when the global economy is recovering slowly.

Even though China is determined to press ahead with painful reforms, some people in Western countries blame China's overcapacity in the steel industry for slumping steel prices and attribute the loss in the steel industries in European countries and the United States to China's dumping of steel products.

But this is unfair. Imbalances, in terms of the value of labor, occur between countries and are particularly apparent when we only focus on a single product category, say, steel products.