The Chinese auto market makes a habit of defying even the most optimistic of predictions.

But when a Chinese government official warned recently that head-long investment by the car industry would leave China with a big overcapacity problem by 2015 – when capacity reaches 31m vehicles per year – he touched off a fierce debate over whether the domestic market can absorb all those cars or whether some will be dumped cheaply on world markets.

“Serious overcapacity will lead to negative market competitiveness, a loss in enterprise efficiency, factory stoppages and other problems,” Chen Bin, a top official at the National Development and Reform Commission (NDRC), China’s economic planning agency, said recently. A Chinese car industry producing 31m vehicles would be nearly twice the size of the current domestic market – estimated at 16m-17m this year – and well over double the current US market.