&imwidth=800&imheight=600&format=webp&quality=medium "Xi warns local governments on overbuilding in AI, EV, and energy sectors")
President Xi Jinping has issued a rare and direct rebuke to local governments across China, questioning their rush into the same emerging sectors. Artificial intelligence, computing power and new energy vehicles.
Speaking at a high-level urban development meeting, Xi asked if every province should be developing the same industries. His comments reflect growing concern that unchecked investment in a few favoured sectors is worsening industrial overcapacity.
For example, even after a wave of consolidation, the EV sector is still running at below 50 per cent capacity. The blunt message comes amid mounting pressure to contain price wars and excess supply, which are eroding profits and fuelling deflation risks.
China faces supply glut in key sectors
China’s economy is showing signs of structural stress. Nominal GDP growth, which reflects changes in both output and prices, slowed to just 3.9 per cent in the second quarter.
This marks the weakest level outside of pandemic years since 1993. Local governments continue to overbuild in key industries. New energy storage goals set by 26 provinces have already doubled the national target for 2025.
Trending Stories
)
Raakh ending explained: The final episode is far more devastating than it appears
)
Shocking new details emerge in Brazil bungee-jumping accident: 21-year-old may have been alive after fatal 130-foot fall
)
VIDEO | Rape, religious conversion, blackmail: Wife of Air Force official makes serious allegations on former classmate
&im=FitAndFill=(700,400))
Why the F-22 can cover vast distances at high speed
)
Trump says Netanyahu begged Obama to reject Iran deal, claims ex-US prez sided with Tehran
)
Peddi Row: Leaked chats and make-up artist reveal Janhvi Kapoor objected to oversexualized shots, but was ignored
)
Kumkum Bhagya actor Sanchita Ugale's final social media post goes viral after tragic death
)
Kashmir trade bodies roll out 50–60% discounts to welcome Amarnath pilgrims
)
Turkish aviation company says it lost Rs 4,700 crore in a day following Operation Sindoor
)
US Indo-Pacific Command changes to Pacific Command amid G7 summit. What message is it sending? The Big Question
)
Meloni's G7 hot mic moment: 'I stopped smoking' and 'most famous couple on Instagram'
)
Erika Kirk to remove ‘kirk’ from her last name? This is the truth of viral claim
)
US claims Strait of Hormuz will be toll-free. Iran says ships will pay maritime service fees. What's really in the peace deal?
)
G7's new reality: India, Brazil and other middle powers are becoming impossible to ignore
)
‘No food in the fridge’: Why Elon Musk, world’s first trillionaire, lives in 400 sq ft home?
&im=FitAndFill=(700,400))
B-52 vs Tupolev Tu-95 "Bear-G": Comparing technical profile of US and Russia strategic bombers
&im=FitAndFill=(700,400))
Top 7 tax-free income sources every Indian taxpayer should know
)
Israeli radars to be made in Tamil Nadu from 2027
)
From pools to construction sites, BMC cracks down to save Mumbai’s remaining water
)
As Raakh revisits the Ranga-Billa case, here's how it shaped Bobby Deol's childhood
)
India-US trade deal enters 'last mile', officials say ahead of Modi-Trump meeting
)
‘If I don't like it, we'll go back to dropping bombs on their heads’: Trump warns Iran if peace deal fails
)
Modi at G7: Global South has a seat at the table, but is anyone listening?
)
'Just a celebration': Mohammad Mohebi clarifies 'gun' celebration after Iran's World Cup 2-2 draw against New Zealand
)
NCERT Mohenjodaro Dancing Girl controversy: Is India's obsession with modesty threatening its culture?
)
G7 Summit hot-mic moment catches US ally's 'difficult' Trump confession. Here's what happened | WATCH
)
'Put cigarette on face, raped by 600-700 different men..': UK MP reveals disturbing grooming gang testimonies in Parliament
)
'For Rs 250 per hour': How Indians are selling their future to American AI companies
)
Marco Rubio's response to deaths of Indian sailors sparks backlash, opposition targets Modi's silence
Premier Li Qiang has pledged to rein in irrational competition in sectors like EVs, while the communist party's top economic body has vowed to regulate local investment strategies more strictly.
Xi’s message also included a warning against overzealous urbanisation, calling for a pace aligned with real demand and economic fundamentals. A new report from the National Economic Research Institute reveals that China’s marketisation index has dropped significantly from its 2021 peak.
The biggest decline was seen in government-market relations, indicating heavier state intervention and reduced market-led resource allocation. Researchers warn that government involvement in sectors like solar and EVs has distorted competition and caused market imbalances. Economists are calling for deeper reforms to rebuild fair, competitive market dynamics and restore investor confidence.