Among the major economies in the world, China is a country that has less capacity utilization. This makes people guess that China’s economy is facing a serious overcapacity problem, but it is difficult to determine the capacity utilization rate of the sub-sectors in a timely manner. Make effective policy recommendations.
We have carefully studied the capacity utilization and related factors in major industrialized countries. The results show that: First, the impact of industrial added value and PPI on capacity utilization changes is critical, industrial added value represents quantity, and PPI represents price. This is no exception in China. Second, indicators for indirect measurement of capacity utilization include industrial production, orders, production and sales rates, industrial product prices, profit margins, and losses. Third, the experience of the United States shows that fluctuations in capacity utilization are mainly affected by demand rather than supply. For example, China's economic stimulus plan for 2009-2010 has temporarily boosted capacity utilization. So we can estimate capacity utilization from a demand perspective.
According to the above ideas, we can sort out and calculate that, from international experience, the capacity utilization rate is between 81-82%, which is a measure of whether the industrial capacity is excessive. 75% or less indicates that the overcapacity is serious, and above 85% indicates that the capacity is insufficient. . Up to now, the process of de-capacity in Europe and the United States has not ended, and it still takes at least 3-5 years. The current strong domestic demand in the United States has largely eased or masked overcapacity.
Table 1. Capacity Utilization of Major Economies Based on the above ideas, we also tried to calculate the overcapacity of China's overall and structure.
On the whole, the extent of industrial overcapacity in China is not very serious. The estimation results show that first, the trend of profit rate and profit growth rate of China's industrial enterprises is basically the same; second, since 2013, China's industrial capacity utilization rate is about 78%-79%, indicating that the overall capacity is excessive, but it is not very serious.
In terms of structure, some industries in China have a serious overcapacity. Among them, electrolytic aluminum, calcium carbide, coke, cement, flat glass, crude steel, wind power equipment, photovoltaic, shipbuilding, capacity utilization rate is less than 70%, electrolytic aluminum, photovoltaic two industries may be less than 60%. The industries with normal production capacity utilization include coal and power generation, and the capacity utilization rate is higher than 85%. The industry with the best capacity utilization is the automobile, and the current capacity utilization rate is over 95%. The overall situation of overcapacity in China is that the overall situation is better than market rumors, and structural problems are more than the overall problem.
Table 2. Capacity utilization rate of some industries in China (2009-2012) We tend to believe that the Chinese economy will continue to suffer from overcapacity by 2018. The process of de-capacity has a series of thorny issues: First, whether the local government's balance sheet continues to expand, and overcapacity is a large part. It is China's current tax system, which enables local governments to expand their production capacity and obtain tax revenue from production and circulation. The impulse of resources. Local state-owned enterprises need more violent mergers and acquisitions, and even market exits. Second, the continuous expansion of central enterprises with continuous leverage is also the reason for the low utilization rate of capacity. This can be attributed to the central government's access to factor resources and the administrative advantages in market access. Failure to adopt a competitive neutral attitude towards companies with different ownership systems. Third, the de-reliance of production capacity relies on pure market means. For example, while the overcapacity of giant steel companies, the small steel mills with “scrap + electric furnace + pollution†will be able to make a comeback under the connivance of the grassroots government. Eliminating backward production capacity requires both administrative and market forces.
Overcapacity in China and even the world's major economies reveals the lack of global innovation. Almost all investors are willing to invest in industries with high returns and undercapacity, not the other way around, but the lack of innovation in the real world makes such industries too scarce. The wave of innovation from large to small can be roughly divided into core values ​​and cultural identity innovation → institutional innovation → economic concept innovation → system innovation → product innovation → technology, brand and marketing innovation → processing and manufacturing innovation. The so-called core values ​​and cultural identity innovation determine the source of innovation. Since the human civilization, the source of innovation has not been abundant. For example, ancient Greece and Rome, to a large extent, only continuously replicated its civilization itself and brought innovation in Europe and its surroundings. Spread. Under this, institutional innovations are derived, including innovations in formal and informal institutions. For example, the innovation of the 3rd Plenary Session of the 11th Central Committee is to break the rigid values ​​and then to reform and innovate the economic management system. This is followed by conceptual innovation, which is a real brainstorming in the context of institutional licensing, such as the re-issuance of the Internet concept based on military needs. Under this concept, subsystems and specific products covering servers, routers, backbone networks, terminals and software emerged. Product innovation often precedes technological innovation and is subject to technological innovation. Innovation in the manufacturing process is at the end of innovation. Under the premise of meeting certain quality requirements, it is the advantage of Chinese enterprises to reduce the processing and manufacturing costs to the limit. But this is not enough to support product innovation or system innovation.
Why is innovation so scarce in China? In the 1980s, domestic scholars answered the question: people, money, and things. It is nothing but talent shortage, especially the lack of top talents; insufficient funds, especially insufficient R&D investment; insufficient experimental conditions and lack of international top laboratories and equipment. After more than 30 years in China, capital investment is not a problem. It is not a problem to establish a top-notch laboratory. It is not a problem to absorb international elites, and there are even various national innovation plans. But innovation, even just technological innovation, is still not energetic. This makes us reflect on why China’s innovation system has failed.
From the point of view, overcapacity reflects the lack of innovation, especially in China. Under the shackles of values, institutions and ideas, it may be futile to seek a national innovation system. Innovation is not just the inspiration of scientists, engineers, and skilled workers, but the soil that needs and fosters these innovative inspirations.
We have carefully studied the capacity utilization and related factors in major industrialized countries. The results show that: First, the impact of industrial added value and PPI on capacity utilization changes is critical, industrial added value represents quantity, and PPI represents price. This is no exception in China. Second, indicators for indirect measurement of capacity utilization include industrial production, orders, production and sales rates, industrial product prices, profit margins, and losses. Third, the experience of the United States shows that fluctuations in capacity utilization are mainly affected by demand rather than supply. For example, China's economic stimulus plan for 2009-2010 has temporarily boosted capacity utilization. So we can estimate capacity utilization from a demand perspective.
According to the above ideas, we can sort out and calculate that, from international experience, the capacity utilization rate is between 81-82%, which is a measure of whether the industrial capacity is excessive. 75% or less indicates that the overcapacity is serious, and above 85% indicates that the capacity is insufficient. . Up to now, the process of de-capacity in Europe and the United States has not ended, and it still takes at least 3-5 years. The current strong domestic demand in the United States has largely eased or masked overcapacity.
Table 1. Capacity Utilization of Major Economies Based on the above ideas, we also tried to calculate the overcapacity of China's overall and structure. On the whole, the extent of industrial overcapacity in China is not very serious. The estimation results show that first, the trend of profit rate and profit growth rate of China's industrial enterprises is basically the same; second, since 2013, China's industrial capacity utilization rate is about 78%-79%, indicating that the overall capacity is excessive, but it is not very serious.
In terms of structure, some industries in China have a serious overcapacity. Among them, electrolytic aluminum, calcium carbide, coke, cement, flat glass, crude steel, wind power equipment, photovoltaic, shipbuilding, capacity utilization rate is less than 70%, electrolytic aluminum, photovoltaic two industries may be less than 60%. The industries with normal production capacity utilization include coal and power generation, and the capacity utilization rate is higher than 85%. The industry with the best capacity utilization is the automobile, and the current capacity utilization rate is over 95%. The overall situation of overcapacity in China is that the overall situation is better than market rumors, and structural problems are more than the overall problem.
Table 2. Capacity utilization rate of some industries in China (2009-2012) We tend to believe that the Chinese economy will continue to suffer from overcapacity by 2018. The process of de-capacity has a series of thorny issues: First, whether the local government's balance sheet continues to expand, and overcapacity is a large part. It is China's current tax system, which enables local governments to expand their production capacity and obtain tax revenue from production and circulation. The impulse of resources. Local state-owned enterprises need more violent mergers and acquisitions, and even market exits. Second, the continuous expansion of central enterprises with continuous leverage is also the reason for the low utilization rate of capacity. This can be attributed to the central government's access to factor resources and the administrative advantages in market access. Failure to adopt a competitive neutral attitude towards companies with different ownership systems. Third, the de-reliance of production capacity relies on pure market means. For example, while the overcapacity of giant steel companies, the small steel mills with “scrap + electric furnace + pollution†will be able to make a comeback under the connivance of the grassroots government. Eliminating backward production capacity requires both administrative and market forces. Overcapacity in China and even the world's major economies reveals the lack of global innovation. Almost all investors are willing to invest in industries with high returns and undercapacity, not the other way around, but the lack of innovation in the real world makes such industries too scarce. The wave of innovation from large to small can be roughly divided into core values ​​and cultural identity innovation → institutional innovation → economic concept innovation → system innovation → product innovation → technology, brand and marketing innovation → processing and manufacturing innovation. The so-called core values ​​and cultural identity innovation determine the source of innovation. Since the human civilization, the source of innovation has not been abundant. For example, ancient Greece and Rome, to a large extent, only continuously replicated its civilization itself and brought innovation in Europe and its surroundings. Spread. Under this, institutional innovations are derived, including innovations in formal and informal institutions. For example, the innovation of the 3rd Plenary Session of the 11th Central Committee is to break the rigid values ​​and then to reform and innovate the economic management system. This is followed by conceptual innovation, which is a real brainstorming in the context of institutional licensing, such as the re-issuance of the Internet concept based on military needs. Under this concept, subsystems and specific products covering servers, routers, backbone networks, terminals and software emerged. Product innovation often precedes technological innovation and is subject to technological innovation. Innovation in the manufacturing process is at the end of innovation. Under the premise of meeting certain quality requirements, it is the advantage of Chinese enterprises to reduce the processing and manufacturing costs to the limit. But this is not enough to support product innovation or system innovation.
Why is innovation so scarce in China? In the 1980s, domestic scholars answered the question: people, money, and things. It is nothing but talent shortage, especially the lack of top talents; insufficient funds, especially insufficient R&D investment; insufficient experimental conditions and lack of international top laboratories and equipment. After more than 30 years in China, capital investment is not a problem. It is not a problem to establish a top-notch laboratory. It is not a problem to absorb international elites, and there are even various national innovation plans. But innovation, even just technological innovation, is still not energetic. This makes us reflect on why China’s innovation system has failed.
From the point of view, overcapacity reflects the lack of innovation, especially in China. Under the shackles of values, institutions and ideas, it may be futile to seek a national innovation system. Innovation is not just the inspiration of scientists, engineers, and skilled workers, but the soil that needs and fosters these innovative inspirations.
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