China has rapidly expanded its industrial capacity, producing far more steel and cement than needed to meet domestic demand. This has led to concerns that China is flooding global markets with excess supply and creating dangerous bubbles in its economy. China's steel production alone accounts for over half of global output and estimates indicate China has 100-200 million tons of excess steel capacity, raising fears China poses the biggest risk to the stability of the world economy.

1. First saviour, then „biggest
risk to world economy“ (Telegraph.co.uk)
China built up massive overcapacity: It´s rolling out as much steel as the next eight
producers combined - it´s producing more cement than the rest of the world – fixed
investment is up 53% in 09 – central bank advisor and the EU see dangerous bubbles
China: Flooding the world (and itself) with steel
92% Highlights
72%
Utilization rate
600 534  China 2008 capacity 660
490 500 mn tons, demand 470 mn
500 423  Close to half of global
400 356 Production output and 100-200 mn tons
volume in excess capacity
280 millions of
300 tons  2008 Q3 global output
minus 20%, China´s
200 production up 15%
04 05 06 07 08 09e
Source: European Chamber in Beijing, Roland Berger
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