China Faces Risk of Economic Stagnation If It Doesn't Address Overcapacity and Transition to Tech-Driven Growth

• China must pursue "smarter investment" and refine industrial policies to address overcapacity in manufacturing and infrastructure as it shifts to tech-driven growth

• Failure to address overcapacity risks trapping China in years of stagnation, as seen in Japan and Europe

• Key problems are overproduction of goods, overinvestment, and need to support emerging hi-tech industries

• Industries like electric vehicles (EVs) meant to be new growth engines have continued to spark overcapacity concerns

• China must develop related industries like chips and engines to stimulate new technologies and fix overcapacity issues