Although championed by academia and policy-makers, the theory of ＂wave phenomenon＂ is a questionable explanation for overcapacity. First, enterprises do not necessarily share the same expectation for future demand o...Although championed by academia and policy-makers, the theory of ＂wave phenomenon＂ is a questionable explanation for overcapacity. First, enterprises do not necessarily share the same expectation for future demand of a promising industry. Second, in its model, overcapacity is explained as a deviation from equilibrium under the incomplete information hypothesis, which is in fact nothing but normal in a market economy. The prime reason for overcapacity resides in the fact that local governments are engaged in a subsidy competition to attract investment. We endeavor to illustrate the following via modeling： the subsidy effect produced by local government＇s offering of cheaper land and matching loans results in less investment from companies. Under this circumstance, enterprises channel a disproportionate amount of funding to building production capacity, which overloads the entire industry. To address the problem, reforms are needed in land property, environmental protection policies, and financial and fiscal systems.展开更多
This paper takes stock of theoretical economic analyses of overcapacity,reveals the factors that induce actual capacity to deviate from market equilibrium, examines market-based mechanisms to resolve overcapacity, and...This paper takes stock of theoretical economic analyses of overcapacity,reveals the factors that induce actual capacity to deviate from market equilibrium, examines market-based mechanisms to resolve overcapacity, and identifies long-term mechanisms and assurances for market-based solutions to overcapacity. Given the limitations of market mechanism and the government's role, neither the market nor the government is able to resolve the problem of overcapacity on its own. In resolving overcapacity, market and the government should play their respective roles rather than replace one another. While the market is a dominant force in regulating capacity and achieving supply and demand equilibrium, the government should provide institutional assurances for effective market operation. Market-based solutions to overcapacity require the government to provide institutional assurances and create a system where market entities decide to enter and exit the market under effective restraints and incentives with a clear boundary.展开更多
ratify the Paris Agreement on combat ing climate change. It was often felt, especially by developing nations, that there was a conflict between the requirement to lower greenhouse gas emissions and legitimate aspirati...ratify the Paris Agreement on combat ing climate change. It was often felt, especially by developing nations, that there was a conflict between the requirement to lower greenhouse gas emissions and legitimate aspirations to industrial development in order to catch up with the developed world.展开更多
Against the backdrop of geopolitical conflicts and major power competition,the US and several Western nations have claimed that China has significant"overcapacity"in manufacturing and have imposed various ta...Against the backdrop of geopolitical conflicts and major power competition,the US and several Western nations have claimed that China has significant"overcapacity"in manufacturing and have imposed various tariff and nontariff trade measures to shield domestic industries.Using data from publicly listed companies,this study conducted an industry-level analysis of investment and capacity expansion in China's manufacturing sector:We find that the growth in manufacturing investment is currently driven mainly by the"new trio"(electric vehicles,solar cells,and lithium batteries),and most enterprises have begun market-oriented clearing.However,the new trio involved in investment and capacity expansion accounts for only a small portion of China's manufacturing sector.The US narrative regarding China's overcapacity is therefore fundamentally misleading.From the perspective of major power dynamics,the essence of the overcapacity narrative lies in China-US trade imbalances,which are,in turn,a consequence of macroeconomic imbalances between the two nations.Insufficient demand in China and excess demand in the US form the underlying impetus behind the trade imbalances.展开更多
In Hongyuan Technology's smart workshop,high-speed texturing machines hum with activity-a snapshot of Chinese textile machinery competing globally.Facing sluggish demand and industrial overcapacity,this chemical f...In Hongyuan Technology's smart workshop,high-speed texturing machines hum with activity-a snapshot of Chinese textile machinery competing globally.Facing sluggish demand and industrial overcapacity,this chemical fiber equipment specialist has carved new international opportunities through"innovation+custo mization."展开更多
A major risk currently facing the Chinese economy is overcapacity,which affects the efficiency of social resource allocation(Xi et al.,2017;Huang et al.,2019).When a company is in crisis,the internal capital market of...A major risk currently facing the Chinese economy is overcapacity,which affects the efficiency of social resource allocation(Xi et al.,2017;Huang et al.,2019).When a company is in crisis,the internal capital market often plays a propping role.This study approached this issue from the perspective of the controlling shareholder and examined whether controlling shareholders provide financial support to enterprises in industries with excess capacity.According to the data for China’s A-share listed companies from 2007 to2019,companies in industries with excess capacity received more financial support from controlling shareholders compared with those in non-overcapacity industries.Analysis of the mechanism revealed that state-owned enterprises and companies with relatively poor financial status received more financial support from controlling shareholders.This study also examined the economic consequences of such support and found that it is conducive to enhancing enterprise value.This study enriches the literature on overcapacity and internal capital markets by demonstrating that internal capital markets play a propping role for companies facing industry-level crises.This finding has both theoretical value and practical implications related to supply-side reform and capacity reduction.展开更多
Based on the features of China's project investment,we consider the formation of production capacity as a matching behavior between local governments and investment enterprises.Using the search and matching model,...Based on the features of China's project investment,we consider the formation of production capacity as a matching behavior between local governments and investment enterprises.Using the search and matching model,we illustrate that the excess capacity in China mainly results from the asymmetry between the gains from and contribution to the project matching:The capacity will be excessive when the proportion of local governments' return exceeds its contribution to the project,and the more unbalanced the return-contribution relationship,the more severe the overcapacity.Meanwhile,we test this theoretical prediction based on a quasi-natural experiment:the reform of administrative approval system.The empirical results show that the reduction of the local governments' return-contribution ratio will significantly raise the capacity utilization rate and mitigate the overcapacity.Industry-specific regression results further indicate that governments' return-contribution asymmetry is more prominent in industries dominated by state-owned enterprises,high-monopoly industries,heavy industries,and industries with serious overcapacity.This paper offers a novel mechanism of overcapacity,a theoretical criterion for judging optimal capacity,and some new regulatory tools with the micro foundation.展开更多
China vows to exert tougher restrictions on excess capacity and redundant construction Enterprises looking to invest in the steel, cement or plate glass sectors will find it difficult to establish operations. The gove...China vows to exert tougher restrictions on excess capacity and redundant construction Enterprises looking to invest in the steel, cement or plate glass sectors will find it difficult to establish operations. The government is saying "no" to any expansion into these industries.展开更多
Zhu Yimin had hoped to get his planned ironworks going after the Spring Festival. He did not expect the local government to turn down his application. Municipal government officials told him that as per current regula...Zhu Yimin had hoped to get his planned ironworks going after the Spring Festival. He did not expect the local government to turn down his application. Municipal government officials told him that as per current regulations, a blast-furnace for smelting iron of less than 100 cubic meters could not be approved and even existing ones would be closed down. Located in central China, Gujiao City of Shanxi Province has not only展开更多
Shandong Development and Reform Commission recently announced in a documen that based on the enterprise self-inspection and provincial inspection results,it had ordered Shandong Weiqiao Pioneering Group and Xinfa Grou...Shandong Development and Reform Commission recently announced in a documen that based on the enterprise self-inspection and provincial inspection results,it had ordered Shandong Weiqiao Pioneering Group and Xinfa Group to close 3.21 million tons o illegal aluminum production capacity by the end of July.Besides Shandong,other provinces and regions with high aluminum展开更多
Addressing pollution caused by economic development,especially the overcapacity of polluting enterprises,is crucial for promoting sustainable economic growth.Targeted environmental policies are essential for strengthe...Addressing pollution caused by economic development,especially the overcapacity of polluting enterprises,is crucial for promoting sustainable economic growth.Targeted environmental policies are essential for strengthening environmental constraints on enterprises and enhancing the effectiveness of regulatory instruments.This study focused on the Environmental Credit Evaluation policy by examining its potential to improve capacity utilization and assessing its broader impact on heavily polluting enterprises.It constructed a time-varying difference-in-difference-in-differences model using panel data from 965 industrial enterprises from 2009 to 2019.The findings reveal that,in comparison with their non-heavily polluting counterparts,heavily polluting enterprises subject to the policy demonstrated significant improvements in capacity utilization.Heavily polluting enterprises that experienced a substantial increase in financing costs also exhibited a marked reduction in inefficient investment,without negatively affecting innovation investments or output.展开更多
This paper provides a critical review of some major efforts made by China to manage the fishing capacity of its marine capture fisheries. It begins by reviewing the key concepts and issues closely related to fishing c...This paper provides a critical review of some major efforts made by China to manage the fishing capacity of its marine capture fisheries. It begins by reviewing the key concepts and issues closely related to fishing capacity management. Following on this, a brief introduction to China’s marine capture fisheries is offered, especially the trends of its marine landings and marine fishing fleets and the status of fish stocks in waters under its jurisdiction. Next comes the main concern of the paper, i.e., some major actions recently initiated by China to deal with the overcapacity problem confronting it. The paper ends with conclusions and suggestions.展开更多
Using China's two-digit manufacturing sectors as samples, this paper first analyzes China's output structure optimization objectives and energy conservation and emissions abatement potentials in 2015, then exa...Using China's two-digit manufacturing sectors as samples, this paper first analyzes China's output structure optimization objectives and energy conservation and emissions abatement potentials in 2015, then examines various factor inputs' matching, and estimates their capacity utilization status, focusing on capital stock factor. Results of our study suggest that:(1) China's manufacturing output structure has great potentials of optimization to reduce energy intensity and carbon intensity by 18.08% and 17.42% respectively over the original values;(2) to reduce factor mismatch, various supporting input factors need to be introduced after manufacturing output structure optimization. The level of capital stock, in particular, requires a substantial change;(3) China's manufacturing capacity utilization(56.14%) in 2015 was far below its average level(73.27%) in the mid and late stage of the 11 th Five-Year Plan period(2008-2010). The low capacity utilization was attributable to economic slowdown and investment inertia. After input factor matching, capacity utilization may rise to the latter level.展开更多
In today＇s economic situation, overcapacity of Chinese traditional manufacturing industry poses a serious threat to sustaineck rapid and healthy development of economy. The primary reasons of excess capacity of Chine...In today＇s economic situation, overcapacity of Chinese traditional manufacturing industry poses a serious threat to sustaineck rapid and healthy development of economy. The primary reasons of excess capacity of Chinese traditional manufacturing industry are the discordant between consumption and investment, the irrational industrial structure, export is not ideal and other causes. Overcapacity of traditional manufacturing industry will lead to business failures, unemployment citizen, deflation, financial risk and other series consequences. We should learn from foreign experience in the processing of excess capacity of traditional manufacturing industry and deal with excess capacity of traditional manufacturing industry in different aspects, so as to ensure stable and healthy development of our country＇ s economy.展开更多
基金This paper is sponsored by the Chinese National Social Science Foundation Project Industrial Overcapacity, Redundant Construction in the Transitioning China： Formation and Management （grant 09AZD017）, the Chinese National Social Science Foundation Project ＂Overcapacity Management and Reform of the Financing System （grant 09AJY002）, the Chinese National Social Science Foundation Project ＂Restructuring and Revitalization Planning of Key Industries in China＂ （grant 10zd＆026）, the Chinese National Social Science Foundation Project ＂A New Industrialized Path： Industrial Restructuring and Upgrading （grant 06＆ZD002）, MOE Project of Key Research Institute of Humanities and Social Sciences in Universities Financial Innovation, Capital Market and Regional Economic Growth （grant 10JJD790027） Nanjing University ＂985＂ Project of Humanities and Social Sciences ＂Improving indigenous innovation capability in China＂ （grant NJU985FW01 ）
文摘Although championed by academia and policy-makers, the theory of ＂wave phenomenon＂ is a questionable explanation for overcapacity. First, enterprises do not necessarily share the same expectation for future demand of a promising industry. Second, in its model, overcapacity is explained as a deviation from equilibrium under the incomplete information hypothesis, which is in fact nothing but normal in a market economy. The prime reason for overcapacity resides in the fact that local governments are engaged in a subsidy competition to attract investment. We endeavor to illustrate the following via modeling： the subsidy effect produced by local government＇s offering of cheaper land and matching loans results in less investment from companies. Under this circumstance, enterprises channel a disproportionate amount of funding to building production capacity, which overloads the entire industry. To address the problem, reforms are needed in land property, environmental protection policies, and financial and fiscal systems.
文摘This paper takes stock of theoretical economic analyses of overcapacity,reveals the factors that induce actual capacity to deviate from market equilibrium, examines market-based mechanisms to resolve overcapacity, and identifies long-term mechanisms and assurances for market-based solutions to overcapacity. Given the limitations of market mechanism and the government's role, neither the market nor the government is able to resolve the problem of overcapacity on its own. In resolving overcapacity, market and the government should play their respective roles rather than replace one another. While the market is a dominant force in regulating capacity and achieving supply and demand equilibrium, the government should provide institutional assurances for effective market operation. Market-based solutions to overcapacity require the government to provide institutional assurances and create a system where market entities decide to enter and exit the market under effective restraints and incentives with a clear boundary.
文摘ratify the Paris Agreement on combat ing climate change. It was often felt, especially by developing nations, that there was a conflict between the requirement to lower greenhouse gas emissions and legitimate aspirations to industrial development in order to catch up with the developed world.
文摘Against the backdrop of geopolitical conflicts and major power competition,the US and several Western nations have claimed that China has significant"overcapacity"in manufacturing and have imposed various tariff and nontariff trade measures to shield domestic industries.Using data from publicly listed companies,this study conducted an industry-level analysis of investment and capacity expansion in China's manufacturing sector:We find that the growth in manufacturing investment is currently driven mainly by the"new trio"(electric vehicles,solar cells,and lithium batteries),and most enterprises have begun market-oriented clearing.However,the new trio involved in investment and capacity expansion accounts for only a small portion of China's manufacturing sector.The US narrative regarding China's overcapacity is therefore fundamentally misleading.From the perspective of major power dynamics,the essence of the overcapacity narrative lies in China-US trade imbalances,which are,in turn,a consequence of macroeconomic imbalances between the two nations.Insufficient demand in China and excess demand in the US form the underlying impetus behind the trade imbalances.
文摘In Hongyuan Technology's smart workshop,high-speed texturing machines hum with activity-a snapshot of Chinese textile machinery competing globally.Facing sluggish demand and industrial overcapacity,this chemical fiber equipment specialist has carved new international opportunities through"innovation+custo mization."
基金financial support from the Youth Program of the National Natural Science Foundation of China(Approval No.72002234)the Ministry of Education Humanities and Social Sciences Research Project(Approval No.19YJC790072)the Young Teacher Development Fund of Central University of Finance and Economics(QJJ1801)
文摘A major risk currently facing the Chinese economy is overcapacity,which affects the efficiency of social resource allocation(Xi et al.,2017;Huang et al.,2019).When a company is in crisis,the internal capital market often plays a propping role.This study approached this issue from the perspective of the controlling shareholder and examined whether controlling shareholders provide financial support to enterprises in industries with excess capacity.According to the data for China’s A-share listed companies from 2007 to2019,companies in industries with excess capacity received more financial support from controlling shareholders compared with those in non-overcapacity industries.Analysis of the mechanism revealed that state-owned enterprises and companies with relatively poor financial status received more financial support from controlling shareholders.This study also examined the economic consequences of such support and found that it is conducive to enhancing enterprise value.This study enriches the literature on overcapacity and internal capital markets by demonstrating that internal capital markets play a propping role for companies facing industry-level crises.This finding has both theoretical value and practical implications related to supply-side reform and capacity reduction.
基金the National Natural Science Foundation of China(No.71203233)the Young Scientists Fund of the National Social Science Fund of China(No.16CJY036).
文摘Based on the features of China's project investment,we consider the formation of production capacity as a matching behavior between local governments and investment enterprises.Using the search and matching model,we illustrate that the excess capacity in China mainly results from the asymmetry between the gains from and contribution to the project matching:The capacity will be excessive when the proportion of local governments' return exceeds its contribution to the project,and the more unbalanced the return-contribution relationship,the more severe the overcapacity.Meanwhile,we test this theoretical prediction based on a quasi-natural experiment:the reform of administrative approval system.The empirical results show that the reduction of the local governments' return-contribution ratio will significantly raise the capacity utilization rate and mitigate the overcapacity.Industry-specific regression results further indicate that governments' return-contribution asymmetry is more prominent in industries dominated by state-owned enterprises,high-monopoly industries,heavy industries,and industries with serious overcapacity.This paper offers a novel mechanism of overcapacity,a theoretical criterion for judging optimal capacity,and some new regulatory tools with the micro foundation.
文摘China vows to exert tougher restrictions on excess capacity and redundant construction Enterprises looking to invest in the steel, cement or plate glass sectors will find it difficult to establish operations. The government is saying "no" to any expansion into these industries.
文摘Zhu Yimin had hoped to get his planned ironworks going after the Spring Festival. He did not expect the local government to turn down his application. Municipal government officials told him that as per current regulations, a blast-furnace for smelting iron of less than 100 cubic meters could not be approved and even existing ones would be closed down. Located in central China, Gujiao City of Shanxi Province has not only
文摘Shandong Development and Reform Commission recently announced in a documen that based on the enterprise self-inspection and provincial inspection results,it had ordered Shandong Weiqiao Pioneering Group and Xinfa Group to close 3.21 million tons o illegal aluminum production capacity by the end of July.Besides Shandong,other provinces and regions with high aluminum
基金support from the Major Program of the National Social Science Foundation of China(No.21&ZD109).
文摘Addressing pollution caused by economic development,especially the overcapacity of polluting enterprises,is crucial for promoting sustainable economic growth.Targeted environmental policies are essential for strengthening environmental constraints on enterprises and enhancing the effectiveness of regulatory instruments.This study focused on the Environmental Credit Evaluation policy by examining its potential to improve capacity utilization and assessing its broader impact on heavily polluting enterprises.It constructed a time-varying difference-in-difference-in-differences model using panel data from 965 industrial enterprises from 2009 to 2019.The findings reveal that,in comparison with their non-heavily polluting counterparts,heavily polluting enterprises subject to the policy demonstrated significant improvements in capacity utilization.Heavily polluting enterprises that experienced a substantial increase in financing costs also exhibited a marked reduction in inefficient investment,without negatively affecting innovation investments or output.
文摘This paper provides a critical review of some major efforts made by China to manage the fishing capacity of its marine capture fisheries. It begins by reviewing the key concepts and issues closely related to fishing capacity management. Following on this, a brief introduction to China’s marine capture fisheries is offered, especially the trends of its marine landings and marine fishing fleets and the status of fish stocks in waters under its jurisdiction. Next comes the main concern of the paper, i.e., some major actions recently initiated by China to deal with the overcapacity problem confronting it. The paper ends with conclusions and suggestions.
基金CASS Innovation Program “Application of Big Data Technology in Economic Forecasting and Early Warning,” National Natural Science Foundation of China(NSFC)Policy Research Key Program(71742001)NSFC Youth Program(71703065)the Ministry of Education Cultural and Social Sciences Fund Youth Program(17YJC790195)
文摘Using China's two-digit manufacturing sectors as samples, this paper first analyzes China's output structure optimization objectives and energy conservation and emissions abatement potentials in 2015, then examines various factor inputs' matching, and estimates their capacity utilization status, focusing on capital stock factor. Results of our study suggest that:(1) China's manufacturing output structure has great potentials of optimization to reduce energy intensity and carbon intensity by 18.08% and 17.42% respectively over the original values;(2) to reduce factor mismatch, various supporting input factors need to be introduced after manufacturing output structure optimization. The level of capital stock, in particular, requires a substantial change;(3) China's manufacturing capacity utilization(56.14%) in 2015 was far below its average level(73.27%) in the mid and late stage of the 11 th Five-Year Plan period(2008-2010). The low capacity utilization was attributable to economic slowdown and investment inertia. After input factor matching, capacity utilization may rise to the latter level.
文摘In today＇s economic situation, overcapacity of Chinese traditional manufacturing industry poses a serious threat to sustaineck rapid and healthy development of economy. The primary reasons of excess capacity of Chinese traditional manufacturing industry are the discordant between consumption and investment, the irrational industrial structure, export is not ideal and other causes. Overcapacity of traditional manufacturing industry will lead to business failures, unemployment citizen, deflation, financial risk and other series consequences. We should learn from foreign experience in the processing of excess capacity of traditional manufacturing industry and deal with excess capacity of traditional manufacturing industry in different aspects, so as to ensure stable and healthy development of our country＇ s economy.
