China Refutes 'Overcapacity' Claims, Repeatedly Citing the Automotive Industry

[Policy Stance] The Ministry of Commerce released a 10,000-word document refuting allegations of so-called Chinese 'overcapacity,' repeatedly using the automotive industry as an example to clarify its position.

Core Development: Industries like automobiles are mischaracterized as 'excessive' but are in fact essential for global green transition

The document emphasizes that China's export growth stems from economies of scale, innovation capabilities, and global demand for green transformation—high export volumes do not equate to overcapacity. The automotive industry, as a prime example, has enhanced its international competitiveness through market-driven choices, not subsidy-driven policies.

Strategic Foundation: Strong domestic demand; China’s role as a 'global market' cannot be ignored

China points out that claims of 'overcapacity caused by insufficient domestic demand' are inconsistent with reality. China is not only a manufacturing powerhouse but also a major consumer market, with new energy vehicles already accounting for over 50% of domestic auto sales in 2025, demonstrating robust internal momentum.

Industry Impact: Opposes politicizing trade issues, calls for open and cooperative supply chains

The document urges major economies to lead by example in ensuring industrial subsidies comply with international rules, opposes protectionism, and advocates building an open and inclusive global production and supply chain to foster a fair environment for high-tech industries, including electric vehicles.