Sir, The report by the European Chamber of Commerce in China which forms the basis of your editorial “The cost of China's excess capacity” (November 30) is unfortunately factually inaccurate. Your conclusion regarding China's economic policy that “the result may well be a crisis in the trading system” is consequently unduly alarmist.
The basis of the report is an alleged clash between a “rising savings rate in the United States”, supposed to account for a decline in the US trade deficit, and China's economic policy. Factually no “rising savings rate” in the US savings rate has occurred. Since the second quarter of 2008 US savings have declined from 12.7 per cent of GDP to 10.4 per cent of GDP.
In any country, including China, it is evidently possible to point to individual industries suffering from overcapacity, as well as those with insufficient capacity – a statistical measure necessarily means cases below and above average.