Is Overcapacity True for Sheet Glass Industry?
Before 2012, total output of sheet glass had been increasing with reasonable capacity utilization rate, normal profit rate, balanced supply and marketing, and low inventory. The conclusion of overcapacity is groundless.
After 2012, home price control policy disrupted the balance of economic system, leading to recession of construction industry and then excess capacity in sheet glass industry. Overcapacity of sheet glass industry is weak link surplus.
Total output of sheet glass is closely related to floor space completed and residents’ demand for housing. Since per capita living space in China is still below the average of developed countries, the output of sheet glass is far from reaching the peak value.
If more low-rent housings are built for the low-income households, sheet glass industry will not face overcapacity; instead, it will need more investment and support.