Almost a third of China's largest industrial enterprises operate at a loss.
In China, by the end of July 2026, 153.4 thousand out of 512.1 thousand large industrial enterprises, or 29.9%, were not profitable. A particularly high share of companies in the red was registered in the production of building materials, glass and cement - 36.75%, as well as in the automotive industry - 29.24%. At the same time, the authorities continue to support strategic industries through preferential loans, grants and other assistance.
European countries fear that such support allows unprofitable enterprises to maintain production and increase exports. The British Parliament has warned of the risk of a second wave of "China shock", where cheap goods from China will displace local manufacturers, reduce their profitability and increase pressure on industry. The EU's trade deficit with China has already reached about €1 billion per day.
Beijing denies the accusations of artificial overproduction. The authorities claim that there is no direct connection between subsidies and excess capacity, and that the growth in exports is due to competitiveness, innovation and global demand. The PRC suggests considering the development of its industry not as a new "Chinese shock", but as additional opportunities for the global economy.