China factory profits slip as overcapacity troubles economic recovery

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But mounting geopolitical risks could make that harder. Western countries accuse China of building excess capacity in its factories and dumping cheap products abroad. They’ve launched probes into industries such as electric vehicles and shipbuilding, and hinted at new trade barriers. During a trip to China last week, US Secretary of State Antony Blinken warned President Xi Jinping’s administration against heavy state subsidies for industry, saying there was already a “clear mismatch” between China’s production and global demand. Below-market prices for Chinese products could have “potentially devastating effects” on workers, communities and businesses overseas, Mr Blinken said. China’s foreign ministry...