How the US can actually benefit from China’s ‘overcapacity’

South China Morning PostCenter-RightEN 2 min read 100% complete by Justin DiamondFebruary 8, 2026 at 09:30 AM

AI Summary

short article 2 min

The article discusses the Western perception of China's industrial "overcapacity" in sectors like solar panels and electric vehicles, arguing that it is actually a result of efficient production and technological advancement. It highlights the differing economic philosophies of the US and China, where China prioritizes deflation of essential goods while the US focuses on asset price inflation. The article suggests that the US views China's production capabilities as a threat, fearing predatory dumping and economic instability. It contrasts the US concern over deflation in China with its own struggle with inflation, revealing a fundamental disagreement on how economic growth should be measured and achieved. The core of the disagreement is whether growth should manifest as cheaper goods or inflated asset prices.

Key Entities & Roles

Key Player Opposition Context

S&P 500 40% West 50% United States ×480% China ×890%

Keywords

overcapacity 100% china 90% united states 80% deflation 70% economic systems 70% inflation 70% asset prices 60% economic growth 60% industrial policy 50% competitiveness 40%