US to China: Tackle Excess Capacity Now

This situation is critical. President Barack Obama has requested China to URGENTLY take care of the excess capacity, because it’s a problem whose intensity is just growing day by day. Urgent actions are needed and this is something that the United States of America have been very clear to China.

Overproduction of industrial goods is a very big problem, more than some individuals realize. Because, just like many firms around the world have pointed out, this overproduction of industrial goods has been ruining local economies all over the world. This is something that has been denounced in the US as well as other countries.

China’s overproduction represents, according to many, an unfair competition because due to the low production costs, they are capable of introducing very-low cost products to foreigner economies and therefore competing in a level that most companies can’t.

Steel:

One of the biggest crisis faced by China has been its overproduction of steel. This crisis can be traced back to April, when China organized a meeting which was attended by 30 nations. The point is that the overproduction of steel is causing a lot of problems for many economies around the world.

And just like with steel, it can be also seen with different types of products. And it has been denounced by important personalities and institutions like the European Union Chamber of Commerce that China is not doing enough in order to fix this overproduction problem.

No Changes:

All seems to point out that China isn’t really doing much in order to deal with the overproduction issue. And this keeps getting denounced by institutions all over the world. It has started to affect different economies all over the world in an unfair manner.

For example, we can see the Peru’s example. There in Peru we can find Gamarra, one of the most important commercial centers in the whole country. Business owners and merchants have been denouncing how China has been introducing extremely-low cost products to Peru and this has been generating a lot of chaos and unfair competition.

Gamarra’s businesses are known for producing clothes of excellent quality, therefore they cannot compete with China’s product whose quality may not be able to compete, yet their price is way too low to go unnoticed by people.

And we can see this Gamarra’s example replicated all over the world. It doesn’t matter if in South America, North America or Europe. It’s important for China to effectively solve its overproduction problem, because it’s starting to cause a lot of damage that will be hard to fix.

Conclusion:

Till date we have not seen great efforts from the part of China in order to tackle this problem. We sincerely hope that after Barack Obama’s statement, China will start taking actions onto this issue, because the longer it waits the worse it will become.

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