excess production capacity

Normal phenomenon of market economy

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Overcapacity means that if the capacity to produce products is saturated, the products produced will exceed social needs Ability. Capacity refers to the ability to produce products, so overcapacity is not overcapacity - even if there is no overcapacity, there may be overcapacity.^[1-3]

Chinese name: excess production capacity
Foreign name: Excess Capacity

Definition: The products produced will exceed social needs Ability of
Definition proposer: Chen Shiqing^[2]
Related disciplines: Microeconomics

catalog

definition

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Capacity refers to the ability to produce products, so overcapacity is relative: 1. overcapacity refers to the overcapacity of specific products. 2. Overcapacity refers to overcapacity in a specific period. 3. Overcapacity is Supply and demand Structural imbalance Caused by. According to the principle that capacity is not equal to product and overcapacity is not excess of product, the solution to overcapacity cannot be achieved only by de stocking. To solve overcapacity only by destocking is to confuse capacity with products. There are two ways to solve overcapacity: one is to reduce overcapacity, and the other is to increase the demand of society for overcapacity products. For enterprises that have formed production capacity High quality enterprise 。 Enterprises unable to operate normally due to overcapacity cannot be regarded as“ zombie companies ”, taking the enterprises unable to operate normally due to overcapacity as "zombie enterprises" and removing them in the name of overcapacity will result in social resources Waste. At the same time, according to the relativity principle of overcapacity, as long as the society increases Related products To solve the structural imbalance between supply and demand, overcapacity can be easily solved. Therefore, the fundamental way to solve overcapacity is not to reduce inventory or capacity, but to increase social demand, that is, we say, to resolve the stock with increment.^[1-3]

excess production capacity Means Actual production capacity More than market demand . The state that exceeds the normal expected level, which can be divided into cyclical overcapacity and Aperiodicity excess production capacity. Cyclical overcapacity means that with the economic recession, some industries show a relative increase in capacity due to shrinking demand, but with the economic recovery requirement Gradually increase, resulting in a relative decrease in production capacity. Non cyclical overcapacity means that economic cycle The overcapacity affected by other factors, including Supply structure And demand structure Structural overcapacity caused by mismatch and distortion affected by system and policy Market supply and demand Institutional overcapacity at that time.

reason

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price mechanism

price mechanism Distortion is mainly reflected in the market caused by improper government intervention Resource mismatch 。 To support Related industries The government often gives certain Financial subsidies And preferential tax policy In order to attract investment from enterprises, local governments will further provide cheap Resource price And acquiesce in the environmental damage caused by enterprises with high pollution and high energy consumption. With the government's improper intervention and stimulus policies production costs It is artificially reduced and the phenomenon of excessive entry and repeated construction occurs, which leads to overcapacity.

Performance appraisal

In order to stimulate the endogenous power of full speed development of local governments and introduce the promotion of cadres competition mechanism , many local governments will gross domestic product And growth rate As the core of the performance appraisal system, this has led local governments to Blind investment , vigorously promote project construction , especially preference for introduction Heavy chemical industry Project, thus bringing GDP and revenue To show the achievements of local governments. However, on the one hand, this performance appraisal system will make local governments only pay attention to immediate interests and ignore long-term interests, on the other hand, it will further lead to improper intervention by the government, thus laying the groundwork for future overcapacity.

Key areas

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real estate

For China's economy The system has global impact and the greatest risk is Real estate bubble 。 The real estate bubble is the underlying cause of overcapacity. Resolving the real estate bubble is the key to resolving overcapacity at its root. To address both the symptoms and the root causes of overcapacity, we must focus on how to resolve the real estate bubble as the root cause of overcapacity.^[8]

On January 23, 2021, New Economic Conference of Economist Circle Held in Beijing, the theme of this meeting is "the seeds of prosperity". Deputy Director of Finance and Economic Commission of the 11th National People's Congress He Keng He said that if China wanted to financial crisis It must be the real estate crisis. "China has built so many high-rise buildings that some people estimate that it can accommodate 3 billion people. This number is a bit large, but Vacancy rate There is no denying that it is big. If these houses are real Housing does not stir It will be out of date after a few years living standard Improved, who would like to live on the 40th floor? The United States and Japan are like this now. This is overcapacity. "^[7]

photovoltaic

Recently, the Ministry of Industry and Information Technology issued a document requiring strict control of new photovoltaic manufacturing projects that simply expand capacity. 《 Economic Information Daily 》The reporter learned through investigation that domestic photovoltaic industry is worried about new overcapacity. According to the latest data of China Photovoltaic Association polysilicon 、 silicon wafer , batteries and components are showing signs of overcapacity.^[9]

Travel?

tourism In the supply side structural reform, we should pay attention to both invigorating the stock and optimizing the increment, pay equal attention to upgrading existing products and developing new business types, and prevent the formation of new overcapacity blindly.^[10]

Highlight industries

The steel production capacity has exceeded the market demand by 120 million tons, but the capacity under construction is 70 million tons.

Electrolytic aluminium The industrial production capacity has reached 10.3 million tons, and the idle capacity has reached 2.6 million tons. The loss of enterprises has exceeded 60%.

At the end of the 11th Five Year Plan period, China's automobile production capacity reached 20 million vehicles, more than double the actual demand, and the production capacity has exceeded 2 million vehicles,

The capacity under construction is 2.2 million vehicles, and the new capacity under consideration and planning is 8 million vehicles.

The current production capacity of alloy is 22.13 million tons, and the operating rate of enterprises is only about 40%.

By the end of 2005, China's coking capacity had reached nearly 300 million tons, with an overcapacity of about 24%. There were 30 million tons of coke under construction and 30 million tons of coke to be built. The problem of overcapacity will continue for 2-3 years.

calcium carbide The current production capacity is 16 million tons, half of which is idle.

Copper smelting The total construction capacity is 2.05 million tons, and the capacity of nearly 3.7 million tons will be formed by the end of 2007 for domestic self-sufficiency copper mine The capacity can only meet about one-third of smelting needs.

country Statistical database According to the data of, the investment in manufacturing industry in 2011 was 10259.409 billion yuan, up 31.8% year on year（ the service sector; the tertiary industry ）The investment in manufacturing was 16287.698 billion yuan, up 21% year on year. The growth rate of investment in manufacturing was 10 percentage points higher than that in service industry. In the first half of the year, the investment in automobile manufacturing reached 351.363 billion yuan, an increase of 36% over the same period of the previous year.

As of March 31, 2012 White electricity Qingdao Haier, a leading enterprise in the industry that took the lead in transforming into a medium and high-end enterprise, announced its 2011 financial report side-by-side combination refrigerator And high-end washing machines above 3000 yuan Market share 32.85% and 35.41% respectively, of which“ Casarte ”This one High end brand Its market share reached 6%, and its refrigerator business Gross profit margin 29.21%.

On April 23, 2012, the website of the National Development and Reform Commission announced the first quarter operation of the four major industries of steel, nonferrous metals, building materials and chemical industry, which showed that the growth of the four major industries slowed down compared with the same period in 2011, including Building materials industry The growth rate of cement output in China slowed down by 10.8 percentage points year on year, and the growth rate of ferroalloy output in steel slowed down by 11 percentage points year on year, which is the product category with more decline in year-on-year growth in the four major industries.

Ethnic securities Chen Wei, a macroeconomic analyst, told reporters that the substantial slowdown in the growth of these industries is related to the overall economic environment

According to the data published on the website of the National Development and Reform Commission, in the first quarter of 2012 Crude steel output 174.22 million tons, with a year-on-year growth of 2.5% and a year-on-year slowdown of 6.2 percentage points; The output of steel was 222.46 million tons, an increase of 6.5% and a decrease of 7.2 percentage points. In addition, coke and ferroalloy show signs of slowing down to varying degrees.

potential

In 2005, the domestic cement market demand for industrial cement was less than 1 billion tons, while the cement production capacity reached 1.3 billion tons, Enterprises above designated size The loss area was 35.9%, with a loss of 4.89 billion yuan.

By the end of 2004, China Installed power generation capacity It has reached more than 500 million kilowatts. The net scale of construction in progress also includes some of the planned ones, and more than 300 million kilowatts. The total installed capacity of power generation in China will exceed 800 million kilowatts after the completion of all construction. If all construction is completed, there may be power supply surplus.

In 2006, the coal supply capacity was about 2.2 billion tons. The supply capacity of China's coal mines was about 1.45 billion tons, and that of township coal mines was about 750 million tons. The supply was slightly greater than the demand.

The production capacity of textile polyester increased from 4.9 million tons in 2000 to 18 million tons in 2005, and the textile capacity increased from 34 million ingots in 2000 to 75 million ingots in 2005. The industry competition has become increasingly fierce, Resource constraints It is also increasingly prominent.

What worries the auto industry is that with the commissioning of new factories in the next two years, the problem of overcapacity will be concentrated. come from Investigation company The data of spare capacity It has reached 6 million vehicles; It is estimated that the idle capacity will rise to 9 million vehicles by 2016. Factories in China by 2015 Annual production capacity It may reach 40 million vehicles. Even taking export into account, this capacity is 35% higher than the absorption capacity of the actual market.

Countermeasures

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expand domestic demand

Of course, in addition to resolutely accelerating the elimination of overcapacity Backward production capacity In addition to the implementation progress of, domestic market demand The expansion of is obviously the key.^[11]

Industrial transfer

In addition, the governance of overcapacity needs a broader vision. The capacity of some industries is significantly excessive in China or in some regions of China, but it is still short or tolerable in some countries or regions of China. Therefore, Industrial transfer It is also an important path to resolve some excess capacity. After all, different places Resource endowment 、 Economic growth stage , Productivity Development level There are differences among others, and this "cascade" difference undoubtedly provides a good space for the transfer of excess capacity.^[11]

gross domestic product

Besides, we can't hold high any more The banner of attracting investment has been raised, and the repeated "GDP contribution" has been dug up by demolition. This destructive activity should also be well rectified. In a word, the governance of overcapacity should first desalinate the color of GDP. Overcapacity is China's economy The current problems that must be seriously faced“ Fried Land ”Of Land finance It is difficult to sustain and lack vitality to drive the economy by investment and printing money.^[11]

By taking a variety of measures, we will strive to solve the problem of overcapacity, maintain social stability and the rights and interests of employees in this process, and enable our economic development to further embark on a sustainable and healthy track.^[5]

Main impacts

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Micro influence

excess production capacity

First, some industries product price The profit declined sharply. Since the middle of the year, due to overcapacity and slowing demand growth, Steel price Sharp decline, compared with the peak in March, steel prices by the end of October Decline More than 30%. At the same time, many Overcapacity industry Enterprise benefits Obvious slip wave, the first 10 months Steel industry profit Year on year growth 11.2%, 52.2 percentage points lower than the same period last year; In the first 10 months, the profits of cement and automobile industries decreased by 60.6% and 36.7% respectively year on year; In addition, oil processing chemical fiber Manufacturing, building materials and Communication equipment The profit of key industries such as manufacturing was negative.

Second rate of sale of marketed goods Decrease, inventory increase, cost increase. Since March, Sales rate of industrial products 5 months Year on year decrease Among them, there was a decline for three consecutive months from August to October. At the same time, enterprises Inventory Significant increase. From January to September, 16 of the 39 industrial sectors manufactured inventory The year-on-year growth exceeded 20%, including steel petrochemical industry And the inventory of finished products in the chemical fiber industry increased by more than 30% year on year.

Third Loss making enterprise Loss amount Increase. In the first three quarters, the loss amount of loss making enterprises was 153.17 billion yuan, up 57.6% year on year, of which the loss amount of loss making enterprises in steel, petroleum processing, chemical fiber and other industries increased nearly or more than twice. Accumulated from January to October, industrial enterprises Loss side It reached 22.37%, an increase of 0.41 percentage points over the same period of the previous year.

Fourth, insufficient construction and waste of resources. Industries with obvious surplus such as ferroalloy 、 Calcium carbide industry enterprise Operation rate Has been reduced to less than half; Steel industry Capacity utilization It is gradually declining. Generally speaking, at present economical operation The phenomenon of "macro joy and micro worry" began to appear.

Macro impact

First, overcapacity in many industries will lead to General price level Obvious decline, forming strong deflation Pressure, increase Macroeconomy Of Uncertainty 。

Secondly, the development of overcapacity will make enterprises' investment expectations and residents' Consumption expectation Decline, which makes economic growth face more and more obvious downward pressure.

Third, the development of overcapacity will lead to banks Non performing assets Significantly increased, financial risk enlarge.^[4]

evaluation criterion

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China has not yet established a qualitative and quantitative approach to overcapacity Scientific evaluation Standards. Europe and America For general use in other countries Capacity utilization Or equipment utilization rate as whether there is excess capacity evaluating indicator 。 The normal value of the equipment utilization rate is between 79% and 83%. If it exceeds 90%, it is considered that the production capacity is insufficient and there is a phenomenon of exceeding the equipment capacity. If the equipment starts less than 79%, it indicates that there may be overcapacity.

It is precisely because there is no accurate standard to judge overcapacity in China at present, so many researchers question the concept of overcapacity. Some scholars have proposed a reasonable concept of overcapacity, but what is a reasonable standard of overcapacity has not been clearly defined.

Some scholars have proposed that industry overcapacity is reflected in three aspects: first, the relative decline in product prices; Second Enterprise profitability The number of loss making enterprises increased due to a sharp decline; Third, industry supply exceeded industry demand. Some people have different views on this. They think that the so-called three standards are related to overcapacity, but they are not One-to-one correspondence Relationship.

Industrial profit The decline was never caused by overcapacity, Price competition The price of raw materials has risen Wage level The rise will lead to a decline in industry profits, which is more direct than the impact of overcapacity on the decline in profits. There are many factors that lead to the decline of the overall efficiency of the industry. The decline of industrial profits is market economy The result of allocating resources.

Therefore, overcapacity is not the most important factor for the decline of enterprise efficiency. Industry supply exceeding industry demand is the need for enterprises to adapt to competition Market growth rate When falling back, enterprises will reserve capacity to deal with the possible "blowout" in the market again.

Deputy Secretary General of China Iron and Steel Association Qi Xiangdong Six indicators are given to determine the industry's serious surplus:

First, product inventory continued to rise sharply, and sales stagnated;

Second rate of sale of marketed goods A sharp decline, relation between supply and demand Serious imbalance;

Third, the price of products has dropped significantly, and has been below the cost line for a long time;

Fourth, a large area of Enterprise losses , enterprises are forced to Debt operation ；

Fifth, a number of enterprises went bankrupt or went bankrupt in succession;

Sixth, import is seriously hindered, export does not count costs, and international trade frictions occur frequently.

He believes that if the above six indicators exist at the same time for a relatively long time, it means that there has been a serious surplus of products. Different from the previous judgment, Qi Xiangdong It refers to the situation when there is a serious surplus, so the factors considered are more comprehensive.

The calculation method of capacity utilization rate is generally divided into two systems. One is bottom-up investigation statistical method First, from top to bottom metering method 。

The bottom-up system adopts survey and statistics methods, that is Segmented industries Set up several sample enterprises, regularly investigate their output and capacity, and then calculate the output and capacity of the whole industry based on the proportion of sample enterprises in the industry to calculate the capacity utilization rate of this sub industry. The method is similar for the upper industry.

Figure 1

The capacity utilization rate obtained by bottom-up survey and statistics is objective and reliable, which can truly measure the capacity utilization. However, this method has high requirements for people, finance, materials and time, and most of them are government departments Industry Association Used. developed country For example, in the United States, the European Union, Japan and other countries, most government departments lead the release of capacity utilization data.

Top down macro measurement methods, including peak method Output gap Law Enterprise investment decision-making model Optimization method , capital stock method, etc., are mostly used by academic researchers. These methods only need to Macroeconometric model Familiar with macro output and investment data. from Specific value It can be seen that the capacity utilization rate estimated by various methods is not the same, but there is not much difference from the fluctuation trend. (See Figure 1)

How to use capacity utilization

Figure 2

We choose Capital stock The annual capacity utilization rate of China from 1952 to 2012 is calculated by the method (Figure 2) 。 Compared with the IMF's estimated capacity utilization data recognized by the market, the trend of our estimated capacity utilization rate is basically the same except for the period from 1995 to 1999; In terms of specific values, there has been little difference since 2003.

When the IMF announced the capacity utilization rate in July 2012, the market was shocked, because China's capacity must be super surplus, taking the "desirable" capacity utilization rate of 79% - 82% in the United States as a reference. But this comparison is logically problematic.

On the one hand, the capacity utilization rate in the United States is obtained by bottom-up survey and statistical method, while IMF and we are derived by top-down macro measurement method. The capacity utilization rate calculated by two different methods does not have Comparability 。

On the other hand, the "desirable" range of the capacity utilization rate of 79% - 82% in the United States is based on the American experience summarized from the economic operation of the United States, rather than the universal law, and cannot be used as a standard to analyze the situation of other countries. The capacity utilization rate of each country should be based on its location Development stage As well as the actual operation of the domestic economy, we can summarize the "desirable" interval, and then judge the overcapacity situation according to the comparison between the capacity utilization and the "desirable" interval.

Example

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On March 8, 2014, the CPPCC National Committee held a consultative meeting on the handling of the proposal with the theme of "giving play to the decisive role of the market, better playing the role of the government, and actively resolving overcapacity".

Of the proposals reviewed, 47 are related to overcapacity. Some proposals have not yet been reviewed, and it is expected that there will be more than 50 proposals related to capacity. Chinese industry The industrial overcapacity is relatively serious, with 22 relatively overcapacity, and the industrial overcapacity rate is more than 80%, especially for steel, cement, electrolytic aluminum plate glass Etc. By the end of 2012, the capacity utilization rate of these industries was seriously lower than the international standard.

Local government intervention promotes blind investment

Chairman of Hong Kong Liwan Group Co., Ltd Wang Zhiliang : One important reason is that government intervention , blind investment promoted by local governments. The investment impulse of enterprises and the performance impulse of local governments make some areas Investment behavior Irrationality. Many places are keen to take land and Tax preference To attract investment, there is duplication of layout and convergence of planning, which makes the risk of potential overcapacity in the short and medium term more prominent.

proposal

Let Hebei Glass Factory do a good job in environmental protection

Fuyao glass Executive Director of Industrial Group Cao Dewang : One motive for resolving overcapacity is to govern the environment. The main cost of glass is fuel. The glass in Hebei is refined with coal coke gas. They not only evade taxes, but also fail to pay taxes Environmental protection facilities One ton can sell for 1200, and our cost is 1400. It was these people who knocked down China's glass market. Standards and assessment are not unified, and we suffer losses. I suggest that we should further investigate those glass factories in Hebei, let them do environmental protection, desulfurization and dust removal. Otherwise I am Don't flatter 。

comment

Liu Kun, Vice Minister of Finance : Your opinions are very good. We will put them into practice in the next step. This is our position. The contradiction between China's overcapacity and Market cycle It doesn't matter much. To solve this problem, the Third Plenary Session of the CPC Central Committee proposed that the market should play a decisive role in resource allocation and the government should play a better role. The Ministry of Finance will study carefully, sort out the proposals according to the opinions of the Third Plenary Session of the CPC Central Committee, and strive to pass Fiscal and tax policies And force enterprises to resolve overcapacity and achieve the goal of addressing both symptoms and root causes.

Qian Guanlin, former Deputy Director of the State Administration of Taxation In 2013, the Ministry of Environmental Protection punished a number of enterprises, and someone calculated that the average fine for each enterprise was only 60000 yuan, so enterprises had a strong impulse to secretly discharge. The elimination of backward production capacity is not effective at all, but also plays a protective role. ours Legal standards The enterprise should be responsible for all Environmental responsibility And implement strict supervision.

Deng Statement, Minister of the Organization Department of the CPC Central Committee From the perspective of the Central Organization Department, the document was issued in 2013 to improve the local government leadership ranks Assessment of. The core is to stop using GDP to talk about heroes. Increase the assessment weight of resource consumption, environmental protection and other indicators. The cadres who violate the scientific development should be held accountable, and the cadres who violate the scientific development should be released Tight hoop mantra 。 The next task is to Education and training China should establish a scientific outlook on development. When selecting cadres, we should adhere to the principle of carrying out assessment. Interview and adjust the leaders who violate the regulations. Introduce a policy to realize lifelong development of "three cadres" Responsibility system 。

Li Yizhong, former Minister of the Ministry of Industry and Information Technology Overcapacity is a common phenomenon. So don't hide or ambush, but admit the reality and solve problems. I am in favor of the decisive measures taken by the National Development and Reform Commission and the Ministry of Industry and Information Technology. Similar to steel, cement and electrolytic aluminum, can we refuse to approve any expansion of production capacity and be ruthless.^[6]

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