China overcapacity fuels trade tensions former WTO chief
Low household demand in China pushes goods into other markets
Rising debts, export reliance hurt growth potential analysts
EU worried about credit funnelled towards China manufacturers

BEIJINGFRANKFURT, Jan 29 Reuters Swiss solar panel maker Meyer Burger is facing the brunt of competition from China and is warning it may have to close its lossmaking production plant in Germany unless the government steps in with financial support.

Chinese manufacturers are deliberately selling goods in Europe far below their own production costs, chief executive Gunter Erfurt told Reuters.

They can do this because the solar industry in China has been strategically subsidised with hundreds of billions of dollars for years.

Growing alarm over Chinese industrial overcapacity flooding the European Union with cheap products is opening a new front in the West39;s trade war with Beijing, which kicked off with Washington39;s import tariffs in 2018.

Brussels39; trade policy is now also turning increasingly protective against the global ramifications of China39;s productionfocused, debtdriven development model.

Throughout last year, China39;s policymakers flagged their intention to make domestic demand a more prominent growth driver to wean the world39;s secondlargest economy off its decadeslong reliance on infrastructure and the property sector.

But China has diverted financial resources from real estate to manufacturers…