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    A worker fulfills orders for energy-saving and environmentally friendly boilers destined for export in a manufacturing enterprise in Nantong, East China's Jiangsu Province on August 4, 2026. The enterprise offers products including industrial waste disposal equipment, with sales to more than 30 countries and regions. Photo: CNS PhotoIn recent years, some economies, anxious about their own industrial competitiveness and market position, have politicized economic and trade issues, taking turns to hype false narratives such as "China overcapacity" and a "China Shock 2.0," and using them as pretexts to roll out protectionist measures.
But what are the facts on the ground?
China's Ministry of Commerce recently released a document titled China's Position on the So-Called Excess Capacity Issue. Reviewing the evolution of the global capacity landscape from a historical perspective, it offers an objective analysis of how industrial subsidies, trade surpluses, economic imbalances and market competition relate to "overcapacity," sets out China's policy practices and the direction of its efforts, and puts forward China's ideas and proposals - a forceful response to the "China overcapacity" narrative. 
Plainly, the argument that "China's inadequate domestic demand gives rise to excess capacity" rests on a logical sleight of hand - it takes a localized phenomenon at the micro level of the market and applies it wholesale to the structure of the macroeconomy, a picture far removed from reality.
China is not only a major manufacturing power but also a major consuming power. Domestic demand has long been the main engine of the Chinese economy.
To see through the logical fallacy of the "overcapacity" narrative, one must first be clear about where the Chinese economy actually sits in the global landscape.
In the course of economic globalization, China has actively integrated itself into the international division of industrial labor and become the "world's factory" in the truest sense. Chinese manufacturing has enriched the global supply of goods, lowered living costs for consumers in countries around the world, and played an important part in easing global inflationary pressure. But to define China simply as a "producer" on that basis, and from there to conclude that it suffers from "inadequate domestic demand and overcapacity," is a proposition that does not hold water.
From 2013 to 2024, domestic demand contributed an average of 93 percent to China's economic growth, with consumption and investment accounting for an average of 55 percent and 38 percent respectively. China's total retail sales of consumer goods rose from 23.8 trillion yuan ($3.53 trillion) in 2013 to 50.1 trillion yuan in 2025, doubling in size.
Measured at the World Bank's purchasing power parity rates, China's total retail sales of consumer goods in 2025 were 1.7 times those of the US, making the country the world's largest market for consumer goods in all but name. China today ranks first globally in the physical volume of goods consumed, and its per capita annual consumption of some industrial products already approaches the levels seen in developed economies.
China keeps expanding its domestic demand and is working toward a higher-level balance between supply and demand.
Growth in China's total retail sales of consumer goods has slowed somewhat in recent years, and some have taken this as proof of weak domestic demand. That reading is neither objective nor complete.
A strong domestic market provides strategic support for Chinese modernization. The outline of China's 15th Five-Year Plan (2026-30) period devotes a dedicated part to building such a market, stressing the need to adhere to the strategic focus of expanding domestic demand, to expand effective investment, to further implement special actions to boost consumption, to promote the expansion and upgrading of commodity consumption, to unleashing the potential of service consumption, to strengthening the foundation of residents' consumption and to continuously improve the consumption environment - using new demand to guide new supply, and using new supply to create new demand, so as to promote a virtuous cycle between consumption and investment, and between supply and demand, achieve a higher level of dynamic balance between supply and demand.
The slowdown in retail sales growth is consistent with China's shift from high-speed growth to high-quality development, and it also reflects the upgrading of the country's consumption structure. China's consumer market is moving faster from one dominated by goods toward one in which goods and services carry equal weight. Spending on services is growing rapidly and is expected to account for more than half of the total by 2030.
China's super-sized market is not only the bedrock of its own development but also a broad platform on which countries around the world can share in the dividends of that growth.
China has ranked as the world's second-largest importer for 17 consecutive years and is a major export destination for nearly 80 countries and regions. It has granted zero-tariff treatment to 63 countries and regions, becoming the first major economy in the world to extend full zero-tariff coverage to every African country and every least developed country that has diplomatic relations with it. It is also the only country to host an international import expo, having staged eight editions of the China International Import Expo with cumulative intended deals worth more than $580 billion. Over the 14th Five-Year Plan period (2021-25) period, China's cumulative imports topped 90 trillion yuan. These facts and figures show clearly that China is not just the "world's factory" but, still more, the "world's market."
Looking ahead, China's middle-income group is set to exceed 800 million people within little more than a decade, and per capita GDP is expected to reach the level of a moderately developed country. With vast room for consumption and ample potential and vitality, domestic demand will remain the main engine of China's economic development and will keep injecting strong momentum into world economic growth.
This was compiled and translated by the Global Times English edition based on an article published in the "Chisu Jinsheng" economic commentary column of the People's Daily on August 6, 2026.
。         Foreign tourists explore customized clothing services at the South Bund Soft Spinning Material Market in Shanghai. Photo: VCG
For many overseas travelers arriving in Shanghai, the Bund and the Oriental Pearl Tower are no longer the first stops on their itineraries. Instead, they head straight to the South Bund Soft Spinning Material Market, where custom-tailored outfits have become a signature experience driving "Chinamaxxing," a viral lifestyle trend popular among global travelers.
The market buzzed with energy, with conversations in various foreign languages echoing across storefronts, when a Global Times reporter visited it on a work day. 
Tourists from different countries take body measurements, browse design references, and discuss tailoring preferences with local shopkeepers. 
Evolving from the time-honored Dongjiadu cloth market, the area now hosts more than 280 fabric vendors and tailor studios, forming a complete industrial ecosystem for custom apparel. 
Inside one local shop, two foreign tourists excitedly tried on a series of Tang-style garments, taking photos of their favorite looks before professional tailors record precise measurements for their custom-fit clothing.
Gabbo, an Italian traveler, told the Global Times that he first discovered the market through TikTok and Instagram. As silk markets in Shanghai have grown popular among Italian tourists, he and his travel companion Nicco came specifically to shop for authentic traditional Chinese garments and premium silk pieces.
"I picked out a brown Tang-style jacket and a white shirt, while Nicole got matching white shorts. We wanted to try something new and plan to wear our custom outfits out tonight because the styles are very fashionable," Gabbo said. "The bespoke measuring service is professional and thoughtful, and the whole shopping experience has been wonderful."
Intl tourists emerge as a major force
Benefiting from China's visa-free policy covering Italy, the pair only needed to submit standard tourist documents for entry. They plan to stay in China for roughly two weeks to explore local culture and lifestyles.
Local tailor shop owners have witnessed a striking surge in overseas customer demand. Driven by expanded visa-free policies and viral social media exposure, growing numbers of foreign tourists come to the market for original Chinese-style custom clothing. 
According to shop owner Li, international visitors now account for 30 to 40 percent of her clientele, a dramatic reversal from previous years when domestic customers dominated orders.
"We source fabrics directly from suppliers and hire in-house tailors to eliminate middleman markups. Our bespoke pieces cost only one-third of similar custom outfits in Western countries," Li explained. The shop also offers expedited services tailored for short-stay travelers, allowing visitors to pick up finished garments within days.
All garments feature original in-house designs that retain classic Tang-style outlines with soft, wearable color tones suitable for daily wear. Many foreign customers style the traditional jackets with casual trousers and sneakers, creating unique, modern outfits that blend Eastern aesthetics and Western casual fashion, Li said.
Qian, another tailor with 20 years of industry experience, has also seen robust growth in overseas orders, with her annual order volume rising 20 percent year-on-year. 
Most foreign visitors come for custom-tailored suits and enjoy the full immersive bespoke production process. Her workshop divides labor for suits, shirts and dresses to boost efficiency, once completing a full set of custom clothes and delivering them to a tourist's hotel by 10 p.m. on the very day of ordering. The studio also accepts personalized design drafts brought by international visitors.
Backed by the mature textile supply chain of the Yangtze River Delta, hand-tailored suits at the market cost merely one-quarter of equivalent bespoke outfits in Europe, with 24-hour rush order services available. This year, market foot traffic has increased roughly 30 percent year-on-year, with foreign shoppers making up 60 percent of all customers, the Global Times learned from the market.
Behind the change are China's visa-free policies. China's 240-hour visa-free transit policy covering 55 countries has greatly facilitated cross-border travel. Official data shows China received 22.91 million inbound foreign visits in the first half of 2026, a year-on-year increase of 20.4 percent, China Media Group reported.
From short-term visits to lasting influence

Boosted by China's visa-free policies, the social media trend "Chinamaxxing" has gone viral worldwide. Easier cross-border travel has allowed young foreigners to immerse themselves deeply in authentic Chinese lifestyles, including traditional fitness practices, Chinese dramas and local food culture. 
Beyond garment customization, Shanghai's inbound tourism experience sector continues to expand. Spring Travel recently launched hands-on traditional snack workshops for foreign visitors, focusing on wonton and spring roll making. Tourists can cook, taste homemade snacks and learn the cultural stories behind local cuisine. 
The workshops have received visitor groups from the US, Brazil and Australia and earned wide praise, the Global Times learned from Spring Travel.
Sugiurat Akuto, one foreign participant, said that making Shanghai snacks left him with precious travel memories. Before leaving China, he asked chefs for original recipes, hoping to recreate authentic Chinese delicacies at home and share his unique Shanghai travel experience with family and friends.
Unlike disposable souvenir purchases during routine sightseeing, custom-tailored clothes and learnable cultural skills turn short travel experiences into enduring cross-cultural connections. "These custom outfits will remain precious memories for decades. Even 20 years later, we will still remember custom-tailoring clothes in China. Every time I see these garments in my wardrobe, I will recall this special trip," Gabbo said, adding that distinctive local custom pieces are far more valuable than ordinary travel souvenirs.
Industry analysts note that the Chinamaxxing phenomenon marks a structural upgrade in China's inbound tourism consumption. Driven by optimized visa policies, foreign travelers are shifting from superficial landmark sightseeing to high-value, personalized immersive experiences. Longer stays and upgraded consumption drive coordinated growth of modern service industries and inject new vitality into China's service economy.
Research by the Shanghai Municipal Commission of Commerce shows that inbound tourists who opt for customized consumption stay an average of six to seven days in Shanghai, more than double the city's average 3.21-day stay for general foreign visitors. 
Current cultural tourism experiential products represent only the initial stage of this emerging industry. China's rich cultural resources can be continuously developed into high-quality, replicable tourism offerings for global audiences, Zhang Yi, CEO of iiMedia Research, told the Global Times on Tuesday.
Most importantly, the Chinamaxxing trend boosts people‑to‑people exchanges. One‑off on‑site travel purchases translate into steady overseas demand and repeat orders, helping international audiences gain deeper insight into China's charm, Zhang noted.
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