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submitted 1 week ago* (last edited 1 week ago) by klu9@piefed.social to c/china@sopuli.xyz

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.

The bigger problem, though, is that EVs are just a part of a broader overcapacity problem involving a myriad of sectors and products.

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[-] glowing_hans@sopuli.xyz 1 points 3 days ago

Depends on the sector. Overcapacity for ammo for the next war is not a waste for example, you never know how long it will last.

[-] captainlezbian@lemmy.world 2 points 3 days ago

You absolutely know how long it can be expected to last. Explosives expire, at which point they cannot be reliably trusted to explode when they are supposed to or to not explode when they aren't supposed to

Now, if you want to keep a warehouse of kalishnakovs in every city just in case, those won't go bad assuming right conditions and that theyre made of durable materials (no plastic). But they may be outdated by the time they're needed.

Keeping overcapacity for weapons of war is a balancing act. You don't want to be caught with your pants down, but you also dont want to be sending boats full of tanks that nobody wants to every conflict lest you have to shut the plant down.

[-] glowing_hans@sopuli.xyz 1 points 2 days ago* (last edited 2 days ago)

China will send expired ammo to africa I guess. Pakistan and Arabs, like Algeria, will buy regardless of quality, as the cold war showed. Egypt bought into the soviet arms and lost to Israel because of it. Iraq lost to the US because of outdated Soviet tanks. And I think history will repeat itself.

this post was submitted on 07 Aug 2025
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