On Economies Of Scale Of Chinese Industrial Enterprises

Approved on March 15~th, 2001, it is indicated in the Guiding Principles for the Tenth Five-Year Plan for National Economic and Social Development that industrial structure adjustment is an important constituent of the readjustment of economic structure, and that optimizing the industrial structure is to form a pattern with moderate centralism within industries, with full competition among enterprises, with leadership of large enterprises and with coordinated development of large, medium and small businesses by relying on the market mechanism of "survival of the fittest" and macro-control, according to the principles of division of labor and cooperation based on specialization and economies of scale. Consequently, it is urgent that economies of scale of enterprises should be developed in order to enhance their competitiveness and optimize their industrial structures. The paper systematically elaborates theories of economies of scale based on some related articles about economies of scale and analyzes the problems confronted by the enterprises in our country in the course of developing economies of scale. Thus, a series of countermeasures are proposed.Chapter One mainly deals with theories of economies of scale. Firstly, comprehensive elaboration to the development of economies of scale, the concept of economies of scale and the function of economies of scale are made. Next, on economies of scale of the enterprise, the concept, the origin and the influential factor of economies of scale are discussed. Thirdly, based on the discussion of economies of scale of the enterprise, further explanation is made to the fact that only in moderate scale can economies of scale be formed by the enterprise. Therefore, a thorough analysis to moderate scale of the enterprise is made.Chapter Two, through empirical analysis to the enterprise economies of scale of our country, indicates that enterprises in our country are in the condition of low industrial centralizing degree and diseconomies of scale. That displays in two aspects: firstly, the enterprises tend to be in small scale; secondly, the industrial centralizing degree is low.Chapter Three makes a specific study on economies of scale of automobile industry and petrochemical industry in our country. Regarding the automobile industry, first, it states that the automobile industry obviously benefits a lot from economies of scale; next, it dealswith the present situation of diseconomies of scale in the automobile industry from the point of view of enterprise scale and industrial centralizing degree; finally, it further discusses the cause of diseconomies of scale in the automobile industry. While as to the petrochemical industry, the problem lies in its small scale of production and management, low industrial centralizing degree and poor competitiveness.Chapter Four makes a key study on the issue how China's enterprises develop economies of scale. And four countermeasures are proposed in the paper, first, through acquisition and merger, expanding the scale of enterprise, adjusting the industrial structure and developing economies of scale; second, developing the business consortiums which are full of economic returns of economies of scale and enhancing the core competitiveness of enterprises in our country; third, expounding how the government formulates a series of industrial organization policies to impel industrial enterprises to develop economies of scale, while emphasizing the main-body role of the enterprise and the positive role of the government in the development of economies of scale; fourth, developing science and technology, carrying on technological innovation and achieving economies of scale.