AI/CAI MENG/CHINA DAILY

　　The West's renewed warnings about Chinese "overcapacity" reflect a deeper concern: China's growing strength in clean energy and advanced manufacturing is challenging long-established Western advantages in some of the industries expected to shape the global economy.

　　In recent months, politicians and media commentators in the United States and other Western economies have increasingly portrayed the expansion of China's electric vehicle, lithium battery, solar and advanced manufacturing industries as a new "China shock". What began as a debate over industrial capacity has increasingly become an argument for higher tariffs, tighter investment restrictions and supply chains organized around geopolitical considerations.

　　China's Ministry of Commerce recently responded with a position paper, arguing that industrial capacity should be assessed against global supply and demand, growth potential and business performance rather than simply comparing production with domestic consumption in a single country.

　　This distinction matters. Major manufacturing economies routinely produce more of certain goods than their domestic markets consume. German automakers depend heavily on overseas sales, and Airbus and Boeing manufacture aircraft for customers worldwide. Few would describe their export-oriented production as evidence of overcapacity simply because output exceeds domestic demand.

　　Applying such a test selectively to China risks turning an economic concept into an instrument of trade policy. Genuine overcapacity can exist in individual sectors, but large exports or rapid production expansion alone do not establish that capacity is excessive.