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First, it is hard to objectively say that China (or any country) is overpopulated. That is a subjective judgement.
China's large population contributes to competition for and depletion of resources. It is a problem to the extent that the use of resources contributes to global problems such as global warming or conflict over resources. In this sense, it is not the size of China's population that is having an impact so much as the fact that the population is getting richer and wanting more things (lots of meat to eat, computers, cars) that use resources.
The size of the world's population as a whole (not just that of China) is a problem to the extent that it creates more demand for resources. What we need to do is to find more efficient ways to fulfill people's demands.
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