Behind China's rapid economic growth is its industrial overcapacity, which is shrinking the industry's profitability, a Taiwanese scholar said yesterday.
Kao Chang (高長), dean of National Dong Hwa University's School of Humanities and Social Sciences, called for attention to China's industrial overcapacity in an article he contributed to the Ministry of Economic Affairs' electronic newspaper.
The article quoted a State Council research center as saying that this year, China's domestic steel products supply would reach around 408 million tonnes, up 48 percent from a year earlier, while its demand would be around 306 million tonnes, creating a surplus of almost 102 million tonnes.
Another metal industry research center in China has estimated that the oversupply will be between 45 million tonnes and 54 million tonnes.
Kao further pointed out that even in China's booming auto industry, the overcapacity problem is worsening. Only 55 percent of China's auto production facilities are currently in use, he said.
Quoting official Chinese tallies, Kao said the Chinese auto industry is now capable of churning out 8 million cars a year, and its annual production capacity would reach 10.2 million units when production lines currently under construction are completed. But last year, only about 5.5 million vehicles were sold, indicating that 45 percent of its capacity was left idle.
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