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Analysis of opportunities and challenges of resolving overcapacity

wallpapers News 2020-12-10

2014 is the first year to implement the spirit of the Third Plenary Session of the 18th CPC Central Committee comprehensively deepen the reform.

This year's government work report clearly points out that "reform is the top priority of the government's work this year.

" Among them, energy reform has been mentioned many times.

The report covers the most concentrated largest length of energy industry, which appears in the part of "striving to build a beautiful home of ecological civilization".

The close relationship between energy ecological environment can be seen.

Some scholars have described China's current overcapacity as follows: "illness comes down like a mountain, disease goes like a thread.

" To some extent, whether it is to resolve overcapacity or declare war on pollution, it is actually the epitome of reform entering the "deep water area".

As Premier Li Keqiang stressed, we must "make up our minds to accomplish the hard tasks with hard measures" -- Li Pengfei, associate researcher of the Institute of industrial economics, Chinese Academy of Social Sciences, Liao Hua, associate professor, energy environmental policy research center, Beijing University of technology? Li Pengfei: it can be summarized into two characteristics.

First, from the previous potential periodic overcapacity to the current actual, medium long-term overcapacity.

Before 2005, there was overcapacity in steel other industries.

However, due to the good economic development situation the rapid growth of market dem, the so-called "excess" was actually consumed in one or two years.

However, since 2009, the problem of surplus in many industries has not been solved, even there is an increasing trend.

Second, from low-end, local surplus to high-end, global surplus.

In terms of specific industries, traditional industries such as steel, cement, non-ferrous metals, coal chemical industry, flat glass other traditional industries spread to emerging industries such as ships, automobiles, machinery, polysilicon, wind power equipment, etc.

For example, steel plate for automobile is the direction of industrial structure adjustment of iron steel industry.

However, after the financial crisis in 2008, the government issued a package of economic stimulus plan, the real estate industry rose rapidly.

As a result, the supply sales of construction steel were booming, the dem for high-tech hot-rolled plate was insufficient, the price was even lower than that of rebar. Q2. What are the causes of global excess? Li Pengfei: there are three main reasons at the government level.

One is the rapid decline in the growth rate of market dem.

As I said just now, before the outbreak of the financial crisis, the situation of China's economic development was very good, the enterprises' expectations of the growth rate of market dem were also relatively optimistic.

Local governments enterprises had a high enthusiasm to make a lot of investment.

A lot of investment means a lot of production capacity, so when the financial crisis broke out, the market dem dropped rapidly the growth rate slowed down.

Therefore, a large amount of investment in the early stage naturally became overcapacity.

Second, the government's economic stimulus package to deal with the financial crisis has also generated a large amount of production capacity.

"In the early days of the international financial crisis, we implemented a package of economic stimulus, now these policies are still in the digestion stage.

" In other words, most of these policies are supply side stimulus policies, but the market dem has not been effectively stimulated, resulting in the problem of overcapacity worsening.

Third, the absence of supervision in local government affairs leads to vicious investment competition among local governments.

At present, the evaluation promotion mechanism of officials with GDP as the evaluation index makes the local government full of motivation to develop the economy.

Some people believe that the rapid development of China's economy benefits from the fierce competition among regions, but the competition between regions brings about the rapid growth of GDP, at the same time, it also pays a huge cost.

The excessive intervention of local governments in the corporatized operation of investment leads to fierce competition among regions in terms of resources, funds investment.

The industrial convergence is serious the expansion of production capacity is difficult to restrain.

On the market level, in the input market, l, natural resources, capital other factors of production market development is not perfect, pricing mechanism is not reasonable, so that enterprises have incentives to obtain these inputs at a lower cost, so that many enterprises fall into the "illusion" of low-cost competition.

In the production market, the domestic foreign market dem environment has indeed deteriorated to varying degrees.

The combination of the two factors makes the traditional industries have almost all-round overcapacity. Q3. What are the hazards of overcapacity? Li Pengfei: if the excess capacity can not be eliminated, the innovation drive proposed by the central government will be out of the question.

This should be the most fatal harm of excess capacity to economic development.

The logic is very simple, that is, overcapacity leads to low-cost, disordered, blood intensive competition in the market, enterprises lack the capital energy to invest in technology research development product upgrading.

Without the investment of enterprises, innovation driven is likely to become empty talk.

Overcapacity will not only pose a great threat to the transformation of economic development mode, but also lead to uncontrollable financial risks.

If the risk of overcapacity accumulates to a certain extent, the triangular debt crisis that broke out in the early 1990s is very likely to reappear.

At present, China is unable to bear the consequences of the outbreak of the financial crisis.

Liao Hua: from the perspective of energy, the formation of capacity itself will consume a lot of energy.

Therefore, a large amount of excess capacity will also cause serious waste of energy resources, which is not conducive to energy conservation emission reduction.

Especially when there is overcapacity in the energy intensive industry, the fierce market competition will greatly reduce the product price.

This is not only easy to lead to new waste, but also may transmit excess capacity to downstream industries, forming a vicious circle that is hard to break. Q4. How to resolve overcapacity by market means? Li Pengfei: at present, our solutions to overcapacity are mostly limited to administrative means.

The advantage of administrative means lies in its quick effect strong pertinence.

its disadvantage is easy to rebound high cost.

It is worth noting that the elimination of backward production capacity by administrative means is always promoted by the central government implemented passively by the local government.

But in essence, the central government is further away from the market, so when the central government finds the problem of overcapacity, the contradiction between supply dem in the market is likely to be very deep.

At present, industries with overcapacity have one thing in common, which is that the government is particularly concerned about.

In order to control the reasonable economic scale, the government carries out the prior examination approval for the enterprises that want to enter these industries.

This means that once the enterprise obtains the license plate through examination approval, it has the attached license plate“Rent ".

Enterprises will try their best to keep the license plate, which is one of the reasons why many enterprises have to maintain production even when they lose money.

For strategic emerging industries, such as polysilicon wind power equipment, which are strongly supported by the state, local governments do not hesitate to provide enterprises with l, energy, resources other production factors at low prices or even free of charge, give enterprises R & D subsidies, tax relief, or relax environmental supervision, give explicit or implicit subsidies to enterprises.

These subsidies distort the investment incentives of enterprises, resulting in excessive investment in production capacity, resulting in industry overcapacity.

The government's excessive intervention in the corporatization of microeconomics obviously distorts the essence of market economy.

When we say that the decisive role of the market in the allocation of resources is to play, in fact, the key lies in putting the government's excessive interference in the market in the institutional cage.

Only if the government has the courage of "self revolution", excess capacity will not become the "cancer" of economic development.

Under the background of deepening the reform in an all-round way, we should be determined to put the full scope budget management into place by means of reform innovation, put all government revenues expenditures into a unified system cage, close the valves of local governments to engage in vicious investment competition with various preferential policies.

At the same time, we should speed up the improvement of the market price formation mechanism of production factors such as l, natural resources capital, so that investors can obtain elements in a unified competitive market of production factors, set a tight fetter for their investment decisions.

The most important thing is to reform the assessment promotion system of local government officials weaken the atmosphere of GDP competition among local governments.

Of course, good use of the "invisible h" does not mean that the "visible h" should "govern by doing nothing".

What should be managed by the government must be strictly supervised by the government, such as setting up high stards of technical threshold environmental protection indicators.

Enterprises that do not meet the stards are not allowed to enter the market.

This kind of compulsory supervision of enterprises by the government can be said to be administrative, but it is still market-oriented in nature.

Once the enterprises that do not meet the stards enter the market, the cost of environmental pollution disordered competition will be borne by the whole society.

Only by internalizing the external costs of enterprises can the market really play a decisive role in the allocation of resources, the government's supervision can be truly scientific effective.

The essence of resolving overcapacity is to adjust the relationship between the government the market.

The radical cure of overcapacity means that the transformation of government functions has achieved great success.

Liao Hua: overcapacity is not the product of China's unique "Chinese characteristics".

There will also be overcapacity in developed countries.

However, due to the relatively mature market mechanism of developed countries, they mainly rely on the market to resolve overcapacity.

the government is trying to do a good job in the labor problems caused by the elimination of production capacity (including related import export trade).

As for the profitability of specific enterprises or industries, the government is not very concerned.

These are the behaviors results of market subjects, also reflect the essence of market economy the role of the government under the market economy system.

(Wang Yuan) expert perspective Wang xiuqiang: GDP growth determines the success or failure of "dual control" of energy.

Let the energy "dual control" policy, which is most concerned by energy enterprises local governments, be written into the government work report again.

On March 5, Li Keqiang, premier of the State Council, put forward in his government work report: "promoting the reform of energy production consumption patterns.

We will increase energy conservation emission reduction, control the total amount of energy consumption.

This year, we will reduce the intensity of energy consumption by more than 3.

9 percent.

" "Double control" assessment of total energy consumption energy consumption intensity is an inevitable choice under the current economic restructuring, industrial upgrading air pollution control.

We can no longer wait for the peak energy consumption to come naturally.

We must take the initiative to control "cut off our wrists by ourselves".

In October 2010, the Fifth Plenary Session of the 17th CPC Central Committee put forward "reasonable control of total energy consumption".

After that, domestic energy research institutions began to conduct special research.

In November 2012, the word "reasonable" was deleted in the report of the 18th National Congress of the Communist Party of China, indicating the attitude determination of total energy control.

For the energy industry, this is a far-reaching, involving a wide range of interests of the new attempt, at least there is no precedent to learn from.

According to the arrangement of this year's national energy work conference, the first task this year is to control the excessive growth of total energy consumption.

From the perspective of national policy orientation, it is expected that the "13th five year plan" long-term total control will continue.

During the Eleventh Five Year Plan period, China's total energy consumption increased from 2.

36 billion tons of stard coal in 2005 to 3.

25 billion tons in 2010, with an average annual growth rate of 6.6%. According to the expected target of the 12th Five Year Plan of energy, the total energy consumption in 2015 will be controlled at 4 billion tons of stard coal, the average annual growth rate of energy consumption will be reduced to 4.

3%, the energy consumption per unit of GDP will be 16% lower than that in 2010.

Affected by the economic slowdown, the growth rate of energy consumption slowed down continuously in 2012 2013, with growth rates of 4% 3.

9% respectively.

The state energy administration expects that the total energy consumption in 2014 will be about 3.

88 billion tons of stard coal, an increase of 3.2%. If this growth rate remains unchanged, the control target of 4 billion tons of stard coal in 2015 is expected to be achieved.

Energy consumption intensity refers to energy consumption per unit output value, that is, the ratio of total domestic primary energy consumption to gross domestic product (GDP).

According to the State Council, this year's energy consumption intensity will be reduced by more than 3.9%. the national energy administration has proposed a specific energy efficiency target of 2014, namely, energy consumption per unit GDP of 0.

71 tons of stard coal.

According to mathematical deduction, when the total energy consumption target energy consumption index are limited at the same time, the total GDP GDP growth rate will be locked.

When the total energy consumption is broken down into different regions, the total GDP of each region is limited.

Is it to maintain high GDP growth or set consumption ceiling? This is the biggest problem in the implementation of the "dual control" policy.

Over the past 30 years, large-scale energy consumption has provided upward momentum for economic growth.

In the current industrial structure dominated by the secondary industry, economic growth is still difficult to get rid of the consumption dependence on coal other energy.

Whether the local government the central government are willing to reduce the GDP growth rate determines the success or failure of the "dual control" goal.

In the process of implementation, the State Council energy management departments should strengthen the supervision of the implementation of total energy consumption decomposition, formulate effective evaluation assessment methods, avoid total amount control becoming a mere formality becoming a digital game.

From the perspective of energy management itself, to implement the goal of "dual control", we should first change the energy production mode dominated by dem turn to the dem side supply side.


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TRUNNANO (aka. Luoyang Tongrun Nano Technology Co. Ltd.) is a trusted global chemical material supplier & manufacturer with over 12 years' experience in providing super high-quality chemicals and Nanomaterials. The nitride powder produced by our company has high purity, fine particle size and impurity content. Please contact us if necessary.
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