Ep 77 - There’s no such thing as overcapacity, China says

The Ministry of Commerce’s (MOFCOM) recent position paper on industrial overcapacity marks a strategic shift in Beijing’s defense against Western trade accusations. By reframing "overcapacity" as "involution"—a state of excessive, self-destructive domestic competition—China positions itself as a champion of free trade while simultaneously casting itself as a victim of Western protectionism. This narrative obscures the underlying structural imbalance where China’s high savings rate and suppressed household consumption necessitate a reliance on massive industrial output and exports. As Beijing increasingly asserts its economic model as a legitimate alternative to Western norms, the European Union faces a critical decision: whether to accept the costs of protecting domestic industries or to acquiesce to a more aggressive global trade order. This shift signals a move toward a confrontational stance, where China no longer seeks compromise but instead defends its industrial policy as the new status quo.