Overcapacity in China: Causes, Impacts and Recommendations

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(CC) Joe Penniston/Flickr

(CC) Joe Penniston/Flickr

The European Union Chamber of Commerce in China and Roland Berger Strategy Consultants have published a report entitled, “Overcapacity in China: Causes, Impacts and Recommendations”. The study offers a detailed analysis of the causes and effects of overcapacity across six key Chinese industries.

The report concludes that overcapacity is a major factor holding back China’s sustainable economic development and traces its impact as a driving force in economic resource waste, a rise in non-performing loans (NPLs) and environmental problems. Excess capacity in certain sectors is holding back Chinese innovation by reducing company profits, meaning that less funding is available for R&D.

The full report is available on the web.