Eleven sectors including cement, steel and auto making are facing overproduction in China, an expert warned here at a conference Saturday.
China has witnessed over 20 percent year-on-year growth rate in fixed assets investment for consecutive three years. Overproduction and declining domestic demand have piled up products, reduced market prices and cut profit margins in some industries.
Cement, aluminium, ferroalloy, calcium carbide, steel, auto, power, coal, copper, charcoal and textile industries are facing, or will face surplus in production capacity, said Cao Yushu, deputy secretary-general with the State Development and Reform Commission.
Cement demand was less than 1 billion tons in 2004 while the production capability reached 1.25 billion tons. The industry will make a profit of 3.5 billion yuan (about 431.6 million U.S. dollars) in 2005, down by 6.8 billion yuan than a year earlier, Cao said.
Vehicle production capacity in China has outpaced domestic demand by two million units in 2005. According to the plans made by the major auto manufacturers, China is expected to produce 18 million autos, eight million units more than the expected sales by 2010, Cao said.