The problem of overcapacity is a problem that has long plagued China's economic operation and the government's macroeconomic regulation and control. Under the conditions of globalization, multinational corporations and Chinese enterprises use domestic and foreign resources to produce in China, and face sales in both domestic and foreign markets, further increasing the frequency of overcapacity and foreign trade friction in China's domestic related industries. In the context of the increasingly complex domestic and international economic situation, further clarifying the causes of overcapacity, and specifically proposing the government's response to overcapacity, plays an important role in stabilizing economic growth, promoting transformation and upgrading, and improving the market system. Recently, the Policy Research Office of the Ministry of Commerce and the Market Economy Research Institute of the Development Research Center of the State Council jointly held an expert forum on “Overcapacity in China under Globalizationâ€. Many well-known experts in the industry have reasons for overcapacity, overcapacity market and government boundaries. The issues and the characteristics of the industry and performance of overcapacity were discussed in depth. Industry and market reasons for overcapacity Jin Hao, director of the Institute of Industrial Economics of the Chinese Academy of Social Sciences, believes that the reasons for overcapacity can be divided into five categories: first, cyclical overcapacity, such as the outbreak of the international financial crisis in 2008, global demand shrinking, At this time, the existing production capacity or supply is relatively large. Second, competitive overcapacity. Different types of enterprises participate in competition, and some enterprises often complain that other companies are “extensively operating and vicious competitionâ€. Those companies that have been eliminated in the market competition are actually an excess of production capacity. However, it is also necessary to distinguish between situations, and some production capacity can still be started through mergers and acquisitions or reorganizations between enterprises. Third, there is a phased surplus. Since the reform and opening up, China's industrialization process has developed rapidly. The process of industrial restructuring and technological progress has been highly compressed. In just 30 years, the industrialization tasks that can only be completed in developed countries for 50 or even 100 years have been completed. The rapid expansion of production capacity may There is no perfect match between the rapid upgrades of demand, and overcapacity may occur locally in a certain period of time. Fourth, policy overcapacity. For example, the government's industrial policy is not appropriate, resulting in multiple local projects, and applicants can get more government subsidies. There is a policy oscillation in production capacity. Fifth, institutional overcapacity. No matter what industry is developed, resources cannot be left behind, such as land and funds. The enterprise budget constraint is not hard enough, the financial mechanism is unreasonable, the land acquisition cost is low, the energy price is unreasonable and excessive approval, resulting in rapid expansion of the company's production capacity, in order to obtain more resources. If the approval is a scarce resource, once it is approved, it will be more and faster. In addition, domestic bank credit basically requires collateral. With land or machinery and equipment, it can obtain more funds through mortgage loans to further expand production capacity. Yang Jianlong, deputy director of the Industrial Economics Research Department of the Development Research Center of the State Council, believes that overcapacity is divided into three types according to its nature, namely, cyclical overcapacity, structural overcapacity and long-term overcapacity, which must be treated separately. The most important problems in China at present are the first and second overcapacity problems. Long-term oversupply generally occurs in the middle and late stages of industrialization, and it is too early to judge the third overcapacity problem. Taking the steel industry as an example, in the long run, China will be in the process of industrialization in the next 20, 30 or even 50 years, and it is difficult to accurately estimate the peak of steel production. China's current crude steel output is 500 million tons, but it is cautiously estimated that it will reach 700 million to 800 million tons in the future, so there is no long-term overcapacity problem in China's steel industry. However, in the context of the financial crisis, cyclical overcapacity and structural overcapacity due to inefficient production and sales of certain products and inefficient production do exist. Under normal circumstances, steel production capacity is 10% to 15% larger than the actual demand of steel is normal, and from the total amount of overcapacity, it is likely to ignore the product structure. In fact, many of our steel products are still scarce. Jiang Xinmin, deputy director of the Energy Research and Development Strategy Research Center of the Energy Research Institute of the National Development and Reform Commission, analyzed the reasons for overcapacity. There are four main reasons: First, the imbalance of guiding ideas, the purpose of developing production has not been fundamentally solved; the second is the imbalance between investment and consumption. The third is the imbalance between domestic demand and external demand; the fourth is the imbalance between macro management and market regulation. Overcapacity Market and Government Boundary Issues Jin Wei believes that overcapacity is complex, cyclical and competitive excesses must be resolved through market mechanisms, and policy overcapacity should be resolved through optimization of government policies. Industrial policies should not be discriminatory, and as far as possible, allow industries to compete fairly, rather than deliberately supporting an industry. Because the government does not have the ability to accurately grasp the choice of industrial technology routes, it is difficult to judge whether the future development of the industry is booming, and strong stimulus is likely to lead to excess. Institutional problems can only be achieved through institutional reforms. The reforms in the past 30 years can be called “individual singlesâ€. The reform and opening up is mainly in the industrial sector. The investment systems outside the industries such as finance, social security and land are lagging behind. Under this circumstance, the industry has tried its best to develop and lack the checks and balances of its abnormal expansion system. The current system has stimulated its expansion. Overcapacity In China, some are normal, and some are indeed to be resolved through policy optimization and reform, because the most basic Chinese characteristic is the competition of local governments. As the strength of the government continues to increase and the resources in the hands continue to increase, participating in the competition will cause the market economy to deviate from our original vision, which will further amplify the market surplus inherent in the market economy. Yang Jianlong believes that overcapacity is a kind of market behavior, and the market has a self-regulating process. This self-regulation process has to pay some price. Overcapacity is a necessary prerequisite for ensuring full competition in the market, which can make competitive companies stand out. The key is whether we can avoid these competitive costs and get the results of the competition. At present, the criticism of the problem of overcapacity is reflected in the problems of low level and high energy consumption. If the regulation is carried out for excess capacity, there is a lack of sufficient, reasonable and fair market reasons. Excess capacity is a relative concept and there is no absolute standard. There is no clear standard for backward production capacity. The marketization of energy prices should be categorized, and the market's regulation of backward production capacity should be exerted through energy market prices. Zhang Changchun, director of the Investment Research Institute of the National Development and Reform Commission, believes that China’s overcapacity is mainly due to external factors and not to enterprises. Enterprises are micro-market entities. The most concern is not the surplus problem, but the investment income and expected return problems as well as the risk and profitability. Whether the structure is optimized and whether the production capacity is excessive must be adjusted after market inspection. At present, the surplus of industries such as steel, cement and flat glass is mainly related to the external environment and the government. These industries have obvious externalities on the formation mechanism of land, interest rate, exchange rate, energy and resource prices. There are problems in the system restructuring, land and capital market allocation, important energy resource pricing mechanism, and pollution emission enforcement. The problem is related to our administrative management system and to the cadre's assessment mechanism. Local governments have too strong responsibilities and impulses to develop local economies, and law enforcement is difficult to put in place. As long as the management of energy, resources, and social security is in place, there is no need to control whether the enterprise can continue to survive. The management involves the externalities of the enterprise. The problem now is that management is difficult to achieve, because of the institutional mechanism and the behavior at the source. Leads to a series of subsequent distortions. Industry characteristics and performance of overcapacity Xu Wenying, vice president of China Textile Industry Association, takes the development history of the textile industry as an example. It shows that limiting production capacity itself does not have a prominent effect, but due to the complexity of the actual situation (for example, enterprises usually report The number of ingots) has left the policy enforcement department exhausted. Moreover, the limited production of the ingot itself does not actually improve the profitability of the company. An unexpected and significant effect of capacity constraints in 1998 was to reduce the burden on businesses, improve the balance sheet of companies, and revitalize the macro economy. After the accession to the WTO, many factories began to steal the spindles. The initial economic and trade commission did not realize the necessity in a timely manner, and imposed fines on factories that “violated†the restrictions on production capacity. Actually, the decision of the enterprise is more suitable for the needs of market development. The textile industry has now reached 120 million spindles, significantly exceeding the original estimate. And in 2010, the company's profit was also very good, an increase of 70%, many orders for machinery and equipment have arrived in 2014. Due to the decline in the domestic and international economic situation in 2011, overcapacity has attracted everyone's attention. The cyclical impact of the foreign economic downturn has had a great impact on the textile industry. After all, the textile industry's surplus accounted for 70-100% of the total trade surplus. It is correct to limit the production capacity of backward and negative externalities. It is mainly to adopt regulations and prices to achieve the survival of the fittest, encourage technological progress, continue reform and opening up, and encourage enterprises to allocate resources globally and expand the global market. Jiang Xinmin believes that in recent years, China's manufacturing industry, especially the heavy chemical industry sector, has expanded its production capacity and has more capacity. For example, the planned production capacity of coal has reached 5.6 billion tons, while the total coal demand is 4 billion tons; the steel industry also has about 250 million tons of surplus capacity. In industries with overcapacity, the level of technology is uneven, often reflected in low-capacity overcapacity. Moreover, the backward production capacity of these technologies and processes is often subject to local protectionism and institutional constraints, and there are obvious operational risks. Xu Dongsheng, secretary general of the China Household Electrical Appliances Association, believes that with the rapid development of the economy, especially the implementation of consumer incentives such as home appliances to the countryside and trade-in, new market opportunities have made many home appliance companies optimistic about investment prospects, increasing investment in production facilities and increasing production capacity. Or expand the product line. According to statistics, from 2009 to 2010, the home appliance industry experienced a new round of industrial expansion. At present, the production capacity of refrigerators, air conditioners, refrigerator compressors, and air conditioner compressors are all over or close to 100 million units, slightly higher than the actual market demand. Generally speaking, the home appliance industry has three distinct characteristics: First, most manufacturing equipment and molds have a high proportion of localization, and the investment intensity of fixed assets is not large, and the production capacity is fast. Second, with the excavation of the domestic rural market, the production capacity The surplus problem is basically solved by market demand. Third, the home appliance industry is a market with a high degree of marketization. Enterprises generally expand on their own, rarely through mergers, and the production capacity fluctuates cyclically. Fourth, the export capacity is basically balanced. From the current point of view, the root cause of the relative surplus of home appliance industry is: First, enterprises are more optimistic about the future situation; second, some companies have speculative psychology, through investment in real estate, obtain land value-added income or bank financing; third, local government investment promotion The willingness is strong and objectively promotes the expansion of production capacity. To this end, it is necessary to take various measures, including transforming the current high-investment economic growth mode, reducing local government intervention in the micro-economy, and strengthening scientific guidance on corporate decision-making. Li Quangong, an engineer at the China Iron and Steel Association's Development and Technology and Environmental Protection Department, believes that China's crude steel production capacity is 800 million tons, accounting for half of the world's total. The capacity utilization rate is generally around 80%. In the long run, it is still normal. There is a strong correlation between business and local employment and fiscal revenue. Therefore, simply implementing “shutdown and transferâ€, the local people and the government have resistance. Strict requirements on environmental standards can often be implemented without being implemented. The current problem facing the steel industry is that the company's efficiency is not high. From January to October 2011, the key enterprises' profits were only 84 billion yuan, and the sales profit rate was only 2.76%. Restricting the backwardness and excess capacity of the steel industry, in addition to strictly implementing environmental standards and correcting the distortion of the price mechanism, the steel industry should learn from the experience of Japan and South Korea, consider building its own steel plants in Southeast Asia and Africa, and accelerate the pace of foreign investment. How to deal with overcapacity at the government level Ren Xingzhou, director of the Market Economy Research Institute of the State Development Research Center of the State Council, believes that some industries with high degree of marketization, such as home appliances and light industry, do not have to worry too much about overcapacity. Because these industries are relatively full of competition, enterprises in these industries will make every effort to improve production efficiency and promote product upgrading. Enterprises can freely enter and exit, prices and production capacity are adjusted by the market, investment and business risks are borne by the enterprises themselves, and those excess capacity without profit will inevitably withdraw automatically. The main task of the government is to let the market mechanism play its full role, maintain a fair competitive environment, and improve information symmetry. In this way, excess capacity will be adjusted and will not become a serious problem in economic development. For the strategic emerging industries that are developing rapidly in various places, due to the strong promotion of many local governments and the preferential policies of fiscal, taxation, land and credit, it is easy to promote the growth of these industries in the short term, and the development is too fast. The investment in industrial projects is a fiscal fund with a certain degree of government willingness to pay attention to the overcapacity problems that may arise from these industries. Zhang Changchun believes that to solve the problem of overcapacity, the government needs to establish a long-term mechanism. First of all, the government must manage its own affairs, whether the enterprise is advanced, and whether the industrial structure is reasonably handed over to the market for inspection. The government should look for the institutional mechanisms of the surplus area, establish regulations on consumption and emissions, and strictly enforce the law. At the same time, it should use relevant institutional mechanisms to promote the smooth implementation of law enforcement, such as appropriately increasing local financial capacity and reducing local environmental damage. The pressure of fiscal revenue, the establishment of local fiscal revenue, interest rate marketization, exchange rate marketization reform mechanism. It is necessary to stand on the government's point of view, clarify the responsibilities of the government and enterprises, analyze the causes and propose measures. At present, there is no need to solve the problem of surplus in some areas, because the solution of this problem does not depend on determination or temporary measures, but on the improvement of institutional mechanisms. This is a necessary process. To solve the problem of imbalance, uncoordinated and unsustainable, the processing trade should be transformed and upgraded. The government can do the work of transfer training and social security for employees. The problem of overcapacity in the purely competitive sector is not complicated. The fundamental reason is that the first is the unclear boundary between the government and the market, and the other is the problem of the transitional system. To improve the competitiveness of enterprises, only by determining the status of the investment subject of the enterprise, the enterprise can try its own mistakes instead of relying on the support of government policies. Zhang Guoqing, deputy director of the Policy Research Office of the Ministry of Commerce, believes that the factors of overcapacity are complex, and there are enterprises, markets, systems, and economic operating rules. The excess caused by different reasons should be treated differently. Overcapacity in the competitive field should allow the market to resolve itself, and the government should not intervene; and pay more attention to the excess that may constrain the energy resources bottleneck, because this is related to the sustainable development of the economy, the government must regulate this, and at the same time Pay attention to the way in which regulation is studied. In addition, the government must also regulate and control the excess that may have a major impact on the national economy. Overcapacity and “going out†of enterprises, Jin believes that enterprises can solve capital surplus and reduce trade friction through foreign investment. But Chinese entrepreneurs pay too much attention to dealing with local governments, ignoring the ability to deal with trade unions, the media, lawyers, etc., which often leads to investment failure. In addition to real estate, insurance, finance and other fields, foreign investment can solve the problem of surplus. Zhang Guoqing believes that “going out†should pay attention to propaganda and help other countries solve the bottleneck of demand, such as solving public welfare issues such as electricity, road repair, schools and hospitals. For some sensitive areas, such as resources and energy projects, China should only say nothing or do more. Large state-owned enterprises must learn to “package†them. They can integrate their own companies with companies in the United States and Europe to integrate them into Sino-US or Sino-European joint ventures. The real investment entity is Chinese companies, but it is a foreign country that is not known. Companies or other companies, such "going out" will play down the color of large state-owned enterprises, so as to avoid the "China threat theory" re-emerge, triggering speculation and attention to Chinese investment.
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