Baosteel Under The Background Of Supply-side Reform Research On Countermeasures Of Cost Reduction

Under the new normal,China’s economy has a clear goal because of the supply-side structural reform.As a pillar industry of our national economy,the iron and steel industry has a clear direction of reform.At the beginning of China’s reform and opening up,the growth rate of steel demand was explosive.Because of this,the development of China’s steel industry is booming.Steel has provided the necessary infrastructure support for all walks of life.Enterprises need steel for construction,railway transportation needs steel and urban construction needs steel.But the good times did not last long,after the steel industry has experienced a brilliant period has to face the same industry between the malicious competition.These actions lead to the continuous decline in the price of steel products.Not only that,because the steel enterprises blindly put into production also leads to the steel enterprises’ high cost,overcapacity and inventory backlog and other problems.These problems hinder the normal operation of enterprises and affect the efficient development of the entire steel industry.The supply-side structural reform policy issued by the government in a timely manner effectively alleviated the further deterioration of the current situation of the steel industry.The policy mentioned that the reform goal of the steel industry is to "cut capacity,deleverage,reduce inventory,reduce costs,and strengthen weak links" mainly five tasks.Therefore,guided by the work plan for reducing the cost of enterprises in the real economy published by the state council in August 2016,this paper focuses on the task of "reducing the cost" of baosteel in the context of supply-side reform.By reading the literature related to the work plan of reducing the cost of enterprises in the real economy,and combining with the unique actual situation of baosteel co.,LTD.The article is divided into six parts.The first part is the introduction,which briefly expounds the background and significance of the topic,literature review,research methods and innovative points.The second part is related concepts and theoretical basis,including effective supply theory,effective demand theory,resource endowment theory.The third part firstly introduces baosteel shares,and then analyzes the current cost status of baosteel shares in the context of supply-side reform.Baosteel shares are confronted with such problems as relatively heavy tax burden,high labor cost,increasing energy cost,high logistics cost and relatively more institutional transaction costs.The fourth part analyzes the current situation of baosteel’s stock cost and finds out the reason for the high cost of baosteel’s stock.The fifth part is to find the reasons one by one to put forward targeted cost reduction countermeasures to help baosteel shares better reduce costs.The sixth part is the research conclusion and the research prospect.It is found that baosteel has made some changes through the supply-side structural reform,and the effect of cost reduction has been shown,but there is still room for cost reduction.The future development of the steel industry still needs to adhere to the supply-side structural reform.Baosteel should further reduce thecost by upgrading and transforming,strengthening the strength of scientific research and innovation,and the proportion of high-end products.Finally,it is hoped to provide some reference for other steel enterprises in the context of supply-side structural reform to better reduce costs.In a word,the key to leading the economic development of the new normal is to accelerate the pace of supply-side structural reform,which is of great strategic significance to break through the critical juncture of the future development path of China’s steel industry.