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But these surplus industries can't escape the strange circle of "more and more containment." Some industry analysts believe that it is one of the reasons why poor production capacity is reported. Some experts said that it is imperative to increase the added value of products and improve the industrial structure.
4 "batch" to resolve overcapacity
Jing Xiaobo, deputy inspector of the Operation and Monitoring Coordination Bureau of the Ministry of Industry and Information Technology, revealed that the “Program†will adopt four “batch†methods to resolve overcapacity. That is, by expanding domestic demand, digesting a batch; accelerating the implementation of the strategy of going global, transferring a batch to overseas; optimizing the organizational structure, merging and reorganizing a batch; strict environmental protection and safety energy consumption standards, and eliminating a batch.
Xin Renzhou, deputy director of the Industrial Policy Department of the Ministry of Industry and Information Technology, said that the "Proposal" requires further improvement of environmental protection, energy conservation and technical thresholds for enterprise access. Enterprises that fail to meet the standards will be ordered to rectify and even cancel the industry access qualification. He said that according to the regulations, industries such as non-ferrous metals and coking, which require an entry system, need to amend the industry access conditions every four years to adapt to the economic development trend.
The "Industrial Economic Operation Report for the First Half of 2013" released by the Ministry of Industry and Information Technology shows that the problem of overcapacity in China's industrial sector is further highlighted. At the end of the second quarter of this year, the average industrial capacity utilization rate was only 78.6%, and the idle capacity was as high as 21.4%. Affected by this, the contradiction between oversupply of products has intensified, and downward pressure on prices has continued to increase.
The steel industry is “the first to bear the bruntâ€, and the growth rate of China's steel production capacity is much higher than the demand growth rate. The data shows that crude steel production capacity increased from 420 million tons at the end of 2004 to 970 million tons at the end of 2012, an increase equal to the total crude steel output of the world's second-to-10th place in 2012.
Wang Guoqing, director of the Lange Steel Information Research Center, predicts that China's crude steel production capacity may reach 1 billion tons this year, with over 200 million tons of overcapacity. “The market price is sluggish, and the profits of the entire steel producers are at their lowest point. If this problem persists for a long time, it will definitely be particularly detrimental to the entire industry.â€
Experts call for product structure upgrade
The call for the elimination of backward production capacity is growing louder, but it never escapes the strange circle of “more containment and excessâ€.
Wang Guoqing said that some enterprises have misreported when reporting backward production capacity. "It is more common to repeatedly report some production lines that have been shut down."
In July, the Ministry of Industry and Information Technology announced the first batch of production capacity elimination in 2013, including 1,294 enterprises in 19 industrial sectors including coke, steelmaking and cement. However, in fact, many of the enterprises listed on the list and their backward equipment were actually shut down and dismantled before the announcement.
Among the listed companies involved, 10 announced that their backward production capacity had already been eliminated, and some even stopped production as early as six years ago. For example, the production line of Fujian Nanzhi was actually discontinued in January 2007. Many of the first lists I see now are likely to have been eliminated before.
In addition, Liu Qiuping, chief analyst of Xiben Shinkansen, also told that the annual elimination target is only less than 35% of the overall backward production capacity. The more problems that are eliminated, the more problems remain to be resolved. She said that the current elimination of backward production capacity is very low, it is imperative to increase the added value of products and improve the industrial structure. "The main problem is the industrial structure. We now have serious product homogeneity, fierce competition in low-end products, low added value of products, and importation of high-end varieties."
The R&D expenditure of China's steel institutions accounted for a small proportion of the main business income of steel in 2011 and 2012, and was less than 1% in 2011 and 2012, even though the target of the 12th Five-Year Plan was only 2%. She believes that "insufficient investment in technology has led to insufficient competitiveness of our high-end products and low added value of products."
4 “one batch†of Ministry of Industry and Information Technology to resolve overcapacity steel
Abstract On August 25th, the Ministry of Industry and Information Technology and the National Development and Reform Commission jointly formulated an overall plan for resolving overcapacity (hereinafter referred to as the “Programâ€) as the guiding principle for the next phase of efforts to resolve excess capacity. At present, the program has completed the final revision work and will be launched soon. ...
On August 25th, the Ministry of Industry and Information Technology and the National Development and Reform Commission jointly formulated an overall plan to resolve overcapacity (hereinafter referred to as the “Programâ€) as the guiding principle for the next phase of efforts to resolve excess capacity. At present, the program has completed the final revision work and will be launched soon.