Measurement And Empirical Research Of Overcapacity In China

Since the outbreak of the global financial crisis in 2008,China’s overcapacity problem has become increasingly severe due to the global economic downturn.The Chinese government is aware that the problem of overcapacity has become a major problem hindering social and economic development,and has issued a series of guiding opinions and measures aimed at resolving overcapacity.However,the production capacity has become more and more difficult to resolve.In this context,this paper hopes to reveal the current status and problems of overcapacity in China through empirical research,and propose countermeasures to deal with overcapacity.Firstly,this paper selects the provincial panel data from 2001 to 2016 in 29 provinces of China as the research sample,and measures the capacity utilization rate of each province in the past method by co-integration method.Secondly,according to the measurement results,this paper analyzes the current production capacity of various provinces in China.The status quo and characteristics of the utilization situation;Finally,this paper puts forward several causes of overcapacity,and carries out empirical tests,according to the test results,proposes countermeasures to control excess capacity.The study found that China’s overcapacity situation is not optimistic.It has been generally declining since 2011,and it has become more serious in recent years.It is expected that overcapacity in the next few years will still be one of the major problems that plague the stable and healthy development of the economy.From the provincial level,the provinces with more overcapacity are concentrated in resource-based and heavy-duty provinces such as the Northeast and the Midwest,while the developed coastal provinces such as Jiangsu,Zhejiang and Shanghai do not have serious overcapacity problems.This shows that overcapacity also has significant regional differences.According to the empirical test of the cause of overcapacity,the utilization rate of production capacity is inversely proportional to the proportion of government expenditure to GDP,and is proportional to the proportion of local industrial economy,economic growth rate and marketization level.This shows that provinces with a higher proportion of industrial economy are more likely to withstand the pain of overcapacity in economic restructuring.At the same time,removing excess capacity requires correcting the relationship between the government and the market and giving full play to the role of the market mechanism.In terms of measures to resolve excess capacity,this paper believes that on the one hand,we must adhere to the principle of combining short-term governance with longterm governance.In the short term,we will strictly control new investment with government administrative instructions,and eliminate backward production capacity.In the long run,we should cultivate Develop a sound market mechanism to replace government administrative instructions and automatically eliminate excess capacity based on market principles.On the other hand,considering the fiscal tax-sharing system and the distortion of the government’s intervention in the economic performance system with GDP as the core,we propose to deepen the reform of the fiscal and taxation system,formulate a more scientific and rational performance evaluation system,and eliminate the systemic overcapacity from the root cause.