Industrial capacity should be assessed comprehensively, taking into account global supply and demand, growth potential and corporate performance, rather than simply comparing exports with domestic demand. China's manufacturing strengths should not be broadly characterized as "overcapacity" simply because its products are competitive in global markets.

　　Markets require rules, and governments have a legitimate responsibility to enforce them. But those rules should protect fair competition rather than particular competitors. Issues related to industrial capacity should not be politicized or turned into tools of geopolitical competition.

　　Allowing markets to play their role, maintaining transparent international rules and keeping trade and investment channels open offer a more sustainable path. The alternative is a cycle in which anxiety produces protectionism, protectionism accelerates fragmentation and fragmentation raises costs for everyone.

　　The debate over "overcapacity" is therefore about more than how much China produces. It is about how the global economy responds to a shift in industrial competitiveness. Adapting through innovation and competition may be difficult for established producers, but trying to hold back that shift through protectionism risks leaving everyone worse off.

　　The writer is a research fellow and deputy director of the Institute of American and European Studies at the China Center for International Economic Exchanges.

　　The views do not necessarily reflect those of China Daily.