Bloomberg reports China’s factory glut has alarmed the world, but there’s no quick fix. They write:
The groundswell of complaints about China’s factory output keeps getting louder, but there’s no sign Beijing is ready for fixes that might backfire on its vulnerable economy.
This week European Union leaders, who are threatening tariffs on electric cars, were the latest to scold China about overcapacity. Before she met visiting President Xi Jinping, the bloc’s chief Ursula von der Leyen said she’s hoping for action in the “short term.” […]
In all of this, the underlying issue is that China’s state-led expansion of manufacturing isn’t matched by growth in consumption at home, says Camille Boullenois, an analyst at Rhodium Group.
“There are only a few ways companies can deal with it: they can under-utilize their production capacity, keep goods in inventories, export more, or import less,” she says. “We’re seeing all these effects at the moment in China.”
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