| In recent years, excess production capacity has been an important issue in China’s economic development. Supply is slightly larger than the demand is the normal phenomenon of economic operation, according to the theory of economic cycle, the level of capacity utilization is a reflection of the cyclical fluctuations in market supply and demand. But when the market oversupply beyond a certain threshold, capacity utilization is below a certain level, it means overcapacity. In the process of rapid economic growth in China, overcapacity in some industries always is a chronic illness, in entering the "transition period", under the domestic and international economic environment influence, because overcapacity in some industries is more serious, policy departments attach great importance to overcapacity.Iron and steel industry has been "heavy disaster area" of excess production capacity, after 2012, slowdown in growth of domestic demand for steel,capacity excess deepening in iron and steel industry, it‘s more difficult to cut excessive industrial capacity, especially relying on limiting the production of investment "is difficult to fundamentally resolve the problem of excess production capacity only. To solve the problem of excess capacity, it must rely on the market driven and the government promotion. Therefore, based on to market demand and fiscal policy on the iron and steel industry investment and capacity allocation function perspective, study under the general conditions and the different market status, the effect and asymmetric effect of market demand and fiscal policy on the iron and steel industry investment and capacity allocation, to contribute to government policy to give full play to its fundamental role in the process of managing the problem of excess capacity.Through analysis about the historical research of overcapacity formation mechanism and excess capacity control policy, starting from two perspectives of the investigation of general conditions and the division of market state, conduct the empirical study on the market mechanism and fiscal policy of investment and capacity allocation of iron and steel industry in China using the iron and steel industry data Specific content as follows:The first chapter mainly analyzes the background and significance of the current research, and study on the formation of excess capacity and the effect of fiscal policy on domestic and foreign scholars. The second chapter provides the theory analysis about the market demand, fiscal policy, investment and capacity allocation, and finds that in the process of economic operation, there is a potential impact among the market demand, fiscal policy, investment and capacity allocation. So it is meaningful to study the influence of market demand and fiscal policy on investment and capacity allocation. In the third chapter, we study the influence of market demand and fiscal policy on the capacity allocation of China’s steel industry by VAR model. It is found that market demand and fiscal policy have a certain stimulating effect on investment and production capacity. Chapter four using MS-VAR model with the market condition of iron and steel industry divided into two regimes, through dynamic and static analysis of changes in the steel industry in different market condition, finds that market demand has the role of non symmetry, that is, in different periods has different effects on investment and capacity allocation, as well as fiscal policy. |
