China's domestic GDP increased by 7.4 percent year-on-year to hit 12.82 trillion yuan ($2.08 trillion) in the first quarter of 2014, marking the slowest growth pace in six quarters, according to data released last week by the National Bureau of Statistics.

If one overlooks the short-term repercussions of economic policy reforms, industrial overcapacity emerges as a major factor in the deceleration.

Overcapacity remains a formidable barrier to economic growth and structural transformation in China. But at the same time, this problem will also open new opportunities as market forces gain traction.

Industries bogged down by excessive capacity will have to upgrade their technologies and products to satisfy market demands. At the same time, technological improvements will pave the way for broader consumption of overstocked products.

Take aluminum as one example. China currently churns out more aluminum than it can consume. But as the country's automotive, aviation and packaging industries move up the value ladder, domestic demand for aluminum will naturally increase, creating a healthy downstream market for metal product manufacturers.

The author is Chen Aiping, a media personality.

China Business Times