The Upgrading Path Of Anhui Steel Industry Under The Background Of Overcapacity

In recent years, the overcapacity problem of Anhui steel industry is serious, capacity utilization continued to decline, the community also showed a high degree of concern on the problem. However, the existing theoretical research on the formation mechanism of overcapacity and workarounds still have some defects, and therefore the results of these studies led to governance policies on overcapacity did not have the desired effect, in addition to this, empirical studies on issues related to overcapacity are also not very enough. Considering the steel industry plays a pillar role in the economy of Anhui province, and due to excessive investment in the steel industry in previous years, the industy has accumulated many low-end production ability, so propose a detailed study on the overcapacity problem of the steel industry of Anhui and propose certain solution is very necessary. By summarizing the results of previous studies, this paper propose detailed studies from both theoretical and empirical aspects on the overcapacity problem of Anhui steel industry and then make some suggestions with industrial upgrading theory on the overcpacity problem of Anhui steel industry and governance on this basis.The overcapacity of Anhui steel industry has focused on the capacity utilization index, the data show that in2012, the province’s steel industry capacity utilization was only71.1percent, far below the80%of the alert level, and the profitability of steel industry in Anhui is only2%-4%, less than5%of the alert level, this shows the presence of Anhui steel industry overcapacity problem is very serious. In addition, production of iron and steel industry overcapacity in Anhui also has periodic and structural characteristics, periodic refers to the overcapacity of Anhui steel industry is overcapacity in the context of weak market demand in recent years; structural surplus refers compared at the national average, low-end products accounted for too much in Anhui steel industry, and high-end products is not enough, thus shows a structural surplus characteristics.After conducting fiscal decentralization reforms, local governments began to have a relatively independent economic interests, namely to promote local economic development in order to increase local revenue, while the core index to regional GDP government officials appraisal system, more stimulating local government investment through various channels to promote local economic development incentive. This phenomenon is very obvious in Anhui Province, the main reason is that the overall level of economic development of Anhui Province is not high, so local governments in the province in order to ensure its own revenue, have issued a certain amount of investment targets, in addition, special steel enterprises also makes local governments to vigorously promote investment in the steel industry. Property and fuzzy soft constraints and budget problems in the financial resources available, such as land and other property, making local governments have the ability to invest through the transfer of land and low corporate guarantee loans for investment projects and other measures to invest in disguise subsidies, so as to achieve the purpose of promoting investment. Through further research, the more serious is the low investment business after obtaining land use rights can be secured in accordance with the market price, plus the local government’s improper intervention in the financial system will cause the company’s own funds invested in the project ratio is too low, causing serious risk externalizing problems. And because the steel industry itself Anhui independent R&D capability and technology transfer capabilities are relatively limited, making a large investment into the industry in the low-end production, and the resulting overcapacity problems arise.After considering the mechanism of the overcapacity problem of Anhui steel industry in depth, I believe that overcapacity governance should start from the following aspects, first, it should begin to change inappropriate institutional environment, in addition to changing parts of the province at all levels foreign investment in the steel industry, the government promote irrational behavior, should also take measures to control the low-end production capacity within the construction industry, while the low-end of the existing capacity within the industry to be able to guide its exit, which completely changed the phenomenon of over-investment within the industry; Secondly, we must take appropriate measures to integrate the value chain (?) and gradually improve the position of the steel industry in Anhui value chain; addition, the process of industrial upgrading, but also actively take advantage of the opportunity to undertake coastal industrial transfer of technology to improve the steel industry in Anhui level, and ultimately upgrade Anhui steel industry. In summary, we can upgrade path may be summarized as the steel industry in Anhui and endogenous upgrade two exogenous upgrade. At the end of the article, the author how to promote industrial upgrading process Anhui steel industry made some reasonable suggestions.