Based on the panel data of China’s 33 industrial sectors during 2003—2014, this paper analyzes the overcapacity index of 33 industries in China, and then empirically analyzes the influence of FDI quality on overcapacity with the two-step Systematic GMM method. The result indicates that the fluctuation of China’s overcapacity index is cyclical, but each industry showed marked heterogeneity. Overcapacity problems are mainly found in the mining and heavy industry sectors. In addition, the improvement of the quality of FDI is conducive to alleviating industry overcapacity.
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