China’s ‘Marshall Plan’ Will Not Solve Overcapacity in China’s Economy

To revive the limping economy, China has devised a plan to export its overcapacity.
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China’s ‘Marshall Plan’ Will Not Solve Overcapacity in China’s Economy
A Chinese worker stokes a burning cauldron at a steel mill in Hefei, Anhui, China, on June 25, 2011. STR/AFP/Getty Images
He Qinglian
Updated:

The majority of industries in China face severe overcapacity, which seriously threatens the smooth functioning of China’s economy.

Despite China’s high hopes, “the road map for launching an Asian Investment Bank” remained only a plan at the APEC summit this year. In addition, the Mexican government decided to cancel a $3.7 billion Chinese bid for a hi-speed railway project. China’s “Marshall Plan”—to export its overcapacity—is thus off to a bad start, and Beijing will still need to find ways to deal with this “nuclear threat” to China’s economy.

Phasing out overcapacity would result in huge layoffs, which would destabilize society and contradict the government objective of stability maintenance.
He Qinglian
He Qinglian
Author
He Qinglian is a prominent Chinese author and economist. Currently based in the United States, she authored “China’s Pitfalls,” which concerns corruption in China’s economic reform of the 1990s, and “The Fog of Censorship: Media Control in China,” which addresses the manipulation and restriction of the press. She regularly writes on contemporary Chinese social and economic issues.
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