Experts rebut 'overcapacity' claim by West

China's industrial strength, coupled with its deepening market openness and technological advantages, will generate concrete opportunities for businesses worldwide and offer a robust counter to groundless Western portrayals of the nation's industrial capacity as "China Shock 2.0", experts and executives said.

Their comments came amid a growing trend of certain economies, anxious about their own lack of industrial edge and market standing, hyping up the so-called "overcapacity" narrative against China, framing its production as a threat to global markets and even ratcheting up restrictions on China.

On Tuesday, the Ministry of Commerce released a position paper offering a comprehensive rebuttal to unfounded Western accusations of "overcapacity", explicitly stating that such claims are politically motivated and threaten to destabilize global supply chains and undermine the multilateral trading system.

Data from the ministry showed that China's industrial capacity utilization rate remained within a reasonable range in 2025, with the overall rate for industrial enterprises above designated size standing at 74.4 percent.

The capacity utilization rate — the ratio of actual output to potential output — is the internationally accepted measure for assessing excess capacity.

According to the ministry, developed and rapidly growing economies typically have capacity utilization rates in the range of 75 to 80 percent, while less-developed countries generally operate at 50 to 64 percent.

Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics in Beijing, said that China's industrial ascent is the result of sustained investment in research and development, a complete industrial chain and fierce market competition, and it is a legitimate success story that should not be framed as a "shock" or a "threat" to the world.

"Some Western countries that have been outperformed in this competition have not reflected on their own lack of innovation or cost control; instead, they blame China for developing too fast," Tu added.

Multinational companies are increasingly reaping dividends from China's industrial ecosystem — a payoff reinforced by Beijing's broader opening-up policies — and leveraging them to strengthen their global competitiveness.

Rogier Janssens, president of Merck China, said the country's integrated advantages, such as manufacturing depth, innovation capacity, infrastructure and market scale, have helped support global businesses like Merck in enhancing production and supply resilience.

Meanwhile, China's continuous commitment to opening-up also provides multinational companies with a predictable business environment to drive their long-term strategy forward, Janssens said.

"China has already moved to the 2.0 version of the opening-up policy, as it's not just about enabling multinational companies to access the Chinese market. It's about empowering them to collaborate in innovation," he added.

Even as protectionist sentiment and policies gain ground, Beijing is doubling down on opening its massive market to foster shared development, particularly through a series of import-boosting initiatives.

China's imports grew 22.1 percent year-on-year in the first half of 2026, significantly outpacing export growth of 13.4 percent, according to the General Administration of Customs.

Fabrizio Costa, secretary-general of the China-Italy Chamber of Commerce, said that with a market of 1.4 billion consumers, China remains one of the world's most important destinations for international businesses. "The sheer size of the market and growing interest of Chinese consumers in quality goods create significant opportunities," he said.

"What is more important is that China has translated the positive political message into specific actions. With these initiatives in place, our companies can operate concretely in the market," he added.