This is a series, I on the world. I'm John Bachelor with my friend and co-host

Gordon Chang at Gordon G Chang. We're very pleased to welcome Alan Tonson, our guide on manufacturing.

The factory floor worldwide has been for many years and we come to Alan with a quandary right now what is to be done about what is called overcapacity,

manufacturing overcapacity, deliberately so by the People's Republic of China.

Alan, a very good day to you.

What is overcapacity?

What do they mean when they use that word at the Department of Commerce?

Good evening to you.

Good evening to you. Good evening, John, and Good evening, Gordon.

Overcapacity simply results from government sponsorship or government support of the ability to manufacture stuff and overcapacity as the Chinese have

showed us can take a wide variety of different forms that can come in the form

of keeping your currency artificially cheap, which makes

your exports much more competitive everywhere, including your and including shipments

inside your own country,

it can come in the form of suppressing labor unions,

it can come in the form of massive tax breaks,

it can come in the form of all sorts of regulatory breaks,

it can come in the form of simple cash handouts, and it can come not only from national governments it can come

from state governments and from local governments and that's certainly

been the case when it comes to China.

Gordon you have a question for Alan.

So Alan, when it comes to China,

...