Impact of "Chinese Overcapacity" on Global Trade is Exaggerated, Study Finds

Global Trade Alert, an initiative coordinated by Simon Evenett, professor of international trade at St Gallen University in Switzerland, sought to quantify excess capacity, especially in steel, and the damage to global trade. 

Its report, by Evenett and Johannes Fritz, a research fellow at St Gallen, found that there was no compelling case for governments to get upset about global excess capacity in manufacturing.

“On examination, it turns out that the phrase excess capacity is slippery — rhetorically useful, but hard to pin down, even harder to operationalize, and at the same time woefully misleading.” 

The United States, the European Union and Japan have accused China of trading unfairly by subsidizing bloated steel and aluminum sectors and flooding the world with cheap exports. 

U.S. President Donald Trump has used China’s mammoth steel and aluminum sectors as justification for imposing tariffs on global supplies, causing an outcry from many countries.