Environmental Regulation,Environmental Regulation Competition And Eradication Of Excess Capacity

Since the global financial crisis in 2008.China has been plagued by overcapacity problems.In addition,Europe and the United States'sprotectionism made excess capacity difficult to eliminate and then overcapacity problem intensified.This chronic disease not only slows down our country's economic growth,but also causes some enterprises to close down.At the same time,because the industry is closely related to the traditional financial system,once overcapacity continues to deteriorate,it may eventually lead to systematic financial crisis.Therefore,it is urgent to solve the problem of overcapacity in our country,and it is always the focus of the central economic work.The central government's governance policy is divided into four aspects.For the aspect of industrial policy,it always publish industrial policy to improve the access threshold of industry and the strict examination and approval procedures.For financial policy,it usually control the financial credit and investment.If the companydo not meet the access standardof market,the firm will lack of credit aid.For specialized policies.the government will adopt special policies and measures to eliminate backward production facilities.In terms of environmental policies,documents of energy-saving and emission-reduction will be releasd.Compulsory taxation and environmental protection policies will also be adopted to eliminate high pollution,high energy consumption and high emission.Generally speaking,the above governance policies have achieved some results,but there is still a lot of room to improve.Overcapacity governance policies are mostly administrative coercive measures and general opinions.lack of regional pertinence.The current policy does not fundamentally eliminate the impact of local government's intervention which caused price distortions of land,energy,environment and other factors of productionand the key lies in rationalizing distorted prices of factor.In this process-environmental regulation will play a key role in reversing the price of factor.The improvement of environmental regulation has made the internalization of enterprise's external cost,cost increases can force the company which unable to meet the environmental standards withdraw from the market and reduce backward production capacity and curb blind investment.At the same time,the rise in cost will boost the firm to develop technical innovation,the improvement of production technique increase the quality of product,thus makingthe excess capacity release,which leads to the governance of excess capacity and environmental pollution.In addition,the informal environmental regulation can not be ignored in the process of governance.The construction of our country in the informal regulation are worse than developed countries,thelack of public supervision and government environmental agencies resulted in the problem of pollution.Sometimes only by media reports can draw public attentionabout the environment.This is obviously an utterly inadequate measure for the internalization of environmental costs,so the informal regulation should be introduced.In addition,because of the difference in economic development level and technological innovation condition in the eastern part of China and inmid-Western region,the influence of environmental regulation is different.If the local governments can benefit a lot from the policy change,then they have the motivation to work out the best environmental standards to attract investment.Under fiscal decentralization,local governments have more autonomy,for the promotion of political officials,local government will take different competition strategies to attract limited resources.The environmental regulation competition which is similar to the tax competition and expenditure competition are also one meanto attract liquidity factors,this lead to excessive investment and low level repetitive construction and thus lead to overcapacity.Therefore,only to understand and correct their motivations and strategies can solve the problem.However,domestic research on excess production capacity rare related to environmental regulation,and also less sudy of competitive strategy of environmental regulation.Further research on environmental regulation competition will help to turn the problem to the source(local government competition)and formulate more detailed and more regional environmental regulation policies.In this paper,based on the theory of existing scholars on environmental regulation and excess capacity,combining out the transmission mechanism between the two problems and putting forward research hypothesis.The analysis method of measuring the degree of capacity utilization is data envelopment analysis and also using spatial econometric model to study the environmental regulation for the regional heterogeneity of spatial spillover effect and environmental regulation strategy.The main contents and conclusions are as follows:(1)Using BCC model of DEA method and applying the 2003-2014 years of the input-output data that include labor,capital,energy,finally get the result of China's 256 city's industrial capacity utilization.The trend of the measurement results is basically consistent with the utilization level of the 5000 industrial enterprises from the central bank.(2)Using space model for the study of environmental regulation,and join the informal environmental regulation which most scholars have ignored.The results show that formal and informal environmental regulation can significantly improve capacity utilization.and the impact of informal environmental regulation can not be ignored.The role of environmental regulation in promoting capacity utilization has regional differences.Compared with the eastern region.environmental regulation plays a more important role in the central and western regions.Environmental regulation and competition strategy also exist regional heterogeneity,and the central and western governments adopt 'race to the bottom' competition,and the governmentof eastern region adopts the differentiation strategy.(3)According to the results of empirical analysis,this paper put forward the policy recommendations on resolving overcapacity and environmental pollution problems.Policies include the increase of formal and informal environmental regulation,transformation ofperformance evaluation system and the innovation of government intervention.