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The issue of overcapacity in China's automotive sector has drawn significant attention from the National Development and Reform Commission (NDRC), which is closely monitoring the situation. Ma Kai, head of the NDRC, recently pointed out that China's auto production capacity has already surpassed 2 million units annually, raising concerns about potential market imbalances.
Experts suggest that during the "Tenth Five-Year Plan" period, the NDRC began to highlight the growing problem of excess capacity in the auto industry. This move was seen as a warning to investors, signaling signs of overheating in the sector. The commission is likely encouraging both domestic and foreign investors to be more cautious, and may raise entry barriers for new auto projects in the future.
Chen Bin, deputy director of the Industrial Development Department at the NDRC, previously warned that the overcapacity problem would worsen during the "Eleventh Five-Year Plan" period. Without restrictions on investment, auto production capacity could reach as high as 20 million units by the end of the plan, far exceeding actual demand. To address this, Chen proposed stricter regulations on the approval process for new auto manufacturing projects.
Zhang Boshun, secretary general of the China Association of Automobile Manufacturers Market Trade Committee, believes the government’s most probable response is to increase the threshold for approving new auto projects. According to *Daily Economic News*, these measures are expected to help stabilize the industry and prevent further overexpansion.
With the rapid growth of the Chinese auto market, maintaining a balance between supply and demand is crucial. The NDRC’s actions reflect a broader effort to ensure sustainable development and avoid the pitfalls of overinvestment and market saturation. As the industry continues to evolve, regulatory oversight will play a key role in shaping its future trajectory.
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