Since 2012, industrial overcapacity has become an increasingly serious problem in China, against the backdrop of domestic
economic slowdown and continued downturn in international markets. Overcapacity is widespread in the traditional manufacturing
sector, particularly in iron and steel, cement, electrolytic aluminium, flat glass, and ship-building industries. It is also
grave in emerging industries such as polysilicon, solar cells, and wind power equipment.This book provides an overview on
the overcapacity problem facing China and examines the main characteristics of overcapacity in some important industries.
The book identifies two types of overcapacity: one is excess capacity that results from natural supply-demand dynamics or
cyclical economic fluctuations under a relatively sound market system; the other is overcapacity caused by the overinvestment
of enterprises under a flawed economic system. It probes into how overcapacity is caused and finds two contributors - change
of growth model and institutional flaws. It explores to establish a long-term mechanism for solving the problem. The book
concludes that China should establish a long-term mechanism to prevent and resolve overcapacity, and to establish healthy
relationship between the market and the government.