The problem of excess production capacity in China’s industrial sector was particularly prominent in 2012，and capacities of traditional manufacturing industry and the emerging industry were excess.In 2013，the overall industrial production capacity utilization rises slightly.Demands and business situations of some serious overcapacity industry markets improve，but still at a low level and face a serious excess capacity situation.The deep-seated reasons that caused the excess capacity are the local government competition in the investment field.Industry policy defects are the important reason of excess capacity in some industries，and the reform of state-owned enterprises make the situation worse.The government should establish long-term mechanism to resolve and prevent the excess capacity on the present situation，and make separate implementing scheme to adjust and improve solutions based on the excess capacity，development tendency and the characteristic of different industries.