China Overcapacity tracker

Research evidence excerpt

China Overcapacity tracker

FICC Research

Credit & Macro Research

22 July 2026

China

Overcapacity tracker

June data continue to show a divergence between new-

economy and traditional sectors. External demand is playing

an increasingly important role in absorbing domestic Asia Credit Research

capacity. We see evidence of China moving up the technology Roanna+852 2903Chau2625

roanna.chau@barclays.comvalue chain.

Barclays Bank, Hong Kong

China Economics

Ying Zhang

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Strong becoming more concentrated. China’s June production and export data continue to

show a divergence between new-economy and traditional sectors, although strength is

increasingly concentrated in select upstream and enabling technologies.

External demand is playing an increasingly important role in absorbing domestic capacity.

Household appliances appear to be benefiting from more balanced external demand, as seen in

the sharp production-export divergence in autos and air conditioners.

Exporting overcapacity remains the main theme, but the composition is shifting. The June

data remained consistent with our view that the movement of goods from China would

accelerate and broaden across sectors, although they increasingly differentiate between

capacity-clearing exports and products benefiting from stronger pricing or an improving mix.

Traditional capacity-heavy sectors remain weak domestically. Cement and select industrial

products remain more characteristic of traditional overcapacity exports.

This document is intended for institutional investors and is not subject to all of the