Genuine question, if they have so much excess capacity and low domestic demand, wouldn't it be easier to just export to other countries? Or are there barriers put in place in the world stage that limits this?
Chinese manufacturers on the other hand, seem to be following the "build it and they will buy" philosophy. When you do this, prices (and profits) head towards zero.
This is the exact opposite of the Toyota Way, where customer demand serves as a signal (Kanban) to produce a widget and deliver it when needed.
That's not a simple "just" you have there. Who is buying all those goods?