China’s Leninist industrial policy is creating instability at home and abroad | George Magnus

Overcapacity - from electric vehicles to high-speed rail to housing - is destroying profits as well as GDP

China's astounding technological success in mass-producing quality electric vehicles (EVs) sits alongside a serious flaw in its industrial model: overcapacity.

It has the capacity to produce about three times as many units as it can sell at home. The consequences so far have included widespread price cutting, large losses, misallocation of capital, and surging low-cost EV exports leading to trade conflict.