No need for G20 to discuss overcapacity

Some developed countries want China's excess capacity to be put on top of the G20 summit agenda that starts in Hangzhou, Zhejiang province, in less than a week. Should the G20 summit focus on the issue?

People's Bank of China Governor Zhou Xiaochuan made a key point at the China Economists 50 Forum in February: Since China's overcapacity is a domestic issue, it should be resolved within the country, not at international conferences, in order to keep trade protectionist tendencies away.

We need to have a clear understanding of the correlation between overcapacity and international trade. People generally believe global trade is all about "absolute comparative advantage," as Adam Smith put it in his Wealth of Nations. But Zhou said: