By Huan Yuping, People’s Daily
In recent months, some Western countries have once again revived claims of so-called “China overcapacity”, repackaged them under the label “China Shock 2.0.” This narrative appears designed largely to divert attention from their own structural economic challenges.
Using this framing as justification, these countries have introduced discriminatory trade restrictions that disrupt the stability of global industrial and supply chains. By politicizing normal market competition and turning industrial development into a geopolitical tool, such actions run counter to the principles of market economics and free trade, amounting to a form of protectionist rhetoric.
In response, China recently released China’s Position on the So-called Excess Capacity Issue, outlining its policy stance and clarifying the facts. The reality is clear: China’s industrial development represents not a “China Shock 2.0” but a “China Opportunity 2.0.”
The “China Shock 2.0” narrative fails to withstand scrutiny because it ignores the fundamental dynamics of industrial upgrading and deliberately distorts the logic of global industrial specialization.
Every wave of technological progress brings higher productivity, reshapes industrial division of labor, and transforms global trade patterns. China’s competitive edge in emerging industries such as new energy and electric vehicles is the result of years of technological innovation, a complete industrial ecosystem, and the advantages of enormous market application scenarios.
Claims that “industrial subsidies have created overcapacity” are equally inconsistent with both the facts and international practice. Legitimate industrial support measures including research funding, tax incentives, and policy-based financing, are recognized policy tools under World Trade Organization (WTO) rules and are widely used around the world.
By contrast, some developed economies have introduced massive subsidy programs tied to stringent local production and domestic-content requirements. These measures are overtly exclusionary and discriminatory. It is these policies — not China’s — that pose the real challenge to fair competition and the stability of global industrial and supply chains.
To simply equate trade surplus with overcapacity is a misunderstanding of the basic logic of international trade. China’s export growth is propelled by the progress in economies of scale and innovation, as well as the actual demand from other countries for green transition and industrial development.
Throughout economic history, major manufacturing powers — including the United Kingdom, the United States, Germany, and Japan — have maintained large trade surpluses for extended periods. Even today, the United States exports 80 percent of its chips, while the European Union always sees gigantic trade surplus in automobiles, pharmaceuticals and other advantageous sectors. Would it be reasonable to label these countries with “overcapacity” under the same “surplus equals overcapacity” logic?
It’s also unrealistic to claim that weak domestic demand has led to overcapacity in China. China is not only a manufacturing powerhouse but also a major consumer market. From 2013 to 2024, domestic demand contributed an average of 93 percent to the country’s annual economic growth. In particular, consumption and investment contributed 55 percent and 38 percent, respectively.
Measured by the World Bank’s purchasing power parity, China’s total retail sales of consumer goods in 2025 were approximately 1.7 times those of the United States, making China the world’s largest consumer market.
The International Monetary Fund (IMF) and other organizations have repeatedly pointed out that the huge debt imbalance accumulated in some major economies, along with sluggish investment and productivity growth bottlenecks in certain developed economies, are in fact the primary drivers of economic imbalance in the world today.
Certain economies put their own interests above international rules. They call for fair competition, while pushing protectionism through tariffs, export control and investment restrictions. This double-standard hinders the optimization of global capacity allocation and technological progress in industries.
China’s industrial development brings tangible opportunities, not so-called “shocks” to the world. Over the past decade, China has remained a major engine of global growth, contributing roughly 30 percent to the global economy. “China Opportunity 2.0” is a vivid example of the country engaging with the world and pursuing win-win outcomes.
“China Opportunity 2.0” forcefully propels global cooperation in innovation. According to an IMF study, China’s innovation-driven economic growth is exerting an increasingly stronger spillover effect on global technology development. China’s fast-growing innovative enterprises are bringing significant benefits to investors worldwide. Meanwhile, China’s digital technology framework and inclusive supply have effectively lowered the technological threshold and cost of digital transformation for other countries.
“China Opportunity 2.0” powers and accelerates global green transition. In the face of climate change, a common challenge for humanity, China’s premium new energy products have significantly diversified global supplies. It is estimated that by the end of the 15th Five-Year Plan period (2026-2030), China’s green industries will exceeded 20 trillion yuan ($2.96 trillion), creating even broader space for global green cooperation.
“China Opportunity 2.0” also boosts livelihood improvement around the world. Through rapid industrial development, China is able to offer high-quality, efficient and affordable products to other countries. These products effectively lower living costs and improve quality of life, while easing global inflationary pressures.
Furthermore, “China Opportunity 2.0” provides vital support for industrialization in developing countries. Through capacity cooperation and technologies sharing, China offers affordable high-quality production equipment and technologies to other developing nations, helping them build independent development capabilities.
History has repeatedly shown that protectionism produces no winners. Building barriers and walls is equivalent to closing doors to opportunities.
Facing the historic opportunities presented by a new round of technological revolution and industrial transformation, the international community must abandon the outdated zero-sum mentality. It should embrace openness and win-win cooperation, thereby making the pie of global industrial development larger for everyone.
China is ready to work with other countries to safeguard the multilateral trading system centered on WTO, build an open world economy, and strengthen international industrial cooperation in innovation, green development, and digitalization. The goal is to ensure that “China Opportunity 2.0” benefits more countries and peoples, and injects lasting momentum into global economic recovery.
Time to move beyond the ‘China Shock’ narrative and embrace the ‘China opportunity’
