China is pushing back against claims that its manufacturing sector suffers from "overcapacity." In a new report, the Commerce Ministry argues that China's industrial competitiveness is driven by technological innovation, efficient supply chains, and market forces, not unfair subsidies. It also says the so-called "excess capacity" narrative is being used to justify protectionist trade measures. The response comes as the United States and the European Union continue to scrutinize Chinese exports of electric vehicles and other clean-energy products.