Ambrose Evans-Pritchard suggests that a looming problem festers in the East, “China is putting off the day of reckoning with its crisis response, which is to build yet more plant to flood the world with yet more over-capacity.”
Darn those Chinese people making widgets and then selling them overseas! And darn them for making so many of them! And darn them for sailing thousands of kilometers and dumping them on foreign beaches and down chimneys — without demanding anything in return!
China should immediately adopt a manufacturing quota policy, devised by committees of really clever people, to decide how much of certain goods to produce.
Otherwise, Western consumers being drowned in cheap products will have no other recourse than that of unrestricted submarine warfare. That would help alleviate China’s capacity issues! Perhaps AEP could also outsource to enterprising privateers in Somalia to balance this imbalanceness problem thingy.
Seriously though, the boilerplate surrounding “capacity” is so mindbogglingly nonsensical. Have columnists forgotten where all of their goods come from and the win-win benefits of international trade? If Chinese firms cannot turn a profit, the “overcapacity” issue is entirely self-correcting.
And for the record, if there is one big economic problem facing China, it is with regards to yuan convertibility, as Jim Rogers recently noted.