Frankly I could see China, the US and EU are sleepwalking into a trade war that made Trump's trade war look like a prelude. It is clear by now that the west is terrified of losing their dominant in high tech and high margin industry to China. China not only outcompete them, but China also outprice their products, leaving them with almost no space for survival. Even if they use protectionism and tariffs to protect their market, it still won't help them in competing with China in global market. Without global market, they will lose significant source of lifeline that not only can make their companies grow, but also survive.

That's why they use the term overcapacity to scare the shit out of the rest of the world, just like when they promoting the debt traps to the world to scare them from borrowing from China. We will see overcapacity issue being repeated over and over again in the world stage. Like it or not, it will affect China export to non western market, as we can see from what happen in Brazil recently where they begin to fear the import from China. If China's export to the rest of the world is hindered, then this so called overcapacity issue will become a reality for China industry, and many might have to shutter if they can't export. This is the worst case scenario. IMHO, China need to make the non western market as ally by opening China market for them, and also bring some assemblying factories to their countries. But I'm afraid that is not enough too. China may need to close many of low paid and low margin but employed a lot of people industry like textile, and import textile and more goods from global south, to accommodate the rest of the world so that they can have a piece of cake too. Just like what the US did when it allow China to enter WTO in return for market access to the US companies. We know that it is also a double edge sword since it can make a lot of people unemployed.