Research On Causes And Countermeasures Of Overcapacity In China Engineering Machinery Industry

All projects needs machinery.As the cornerstone of the equipment industry,the Engineering machinery industry plays a pivotal role in the national economy.In recent years,with the acceleration of China’s industrialization process and the implementation of the urbanization strategy,the Engineering machinery industry has continued to blowout and entered a stage of rapid development.In 2016,the total industry scale has reached 500 billion yuan,ranking first in the world in terms of turnover,and ranking second in the world in terms of output value.However,since the first quarter of 2011,due to the superposition of many factors such as the foreign economic crisis and the domestic economic restructuring,there has been a large number of oversupply market conditions in the Engineering machinery industry.The issue of overcapacity is particularly serious.The steadily increasing market holdings and the sluggish market for five consecutive years have made it extremely urgent for the construction machinery industry to reduce its production capacity and structure.This article takes the engineering machinery industry under the background of severe overcapacity in the current stage as the research object.First of all,it elaborates on the connotation of the concept of excess capacity.Secondly,in the theoretical analysis of excess capacity in the engineering machinery industry,it used the government regulation theory,the endogenous economic cycle theory,and the industrial life cycle theory which around the system defects,Spontaneous blind operation of the market economy and industry life cycle to analysis the causes of excess capacity in Engineering machinery industry.Factors affecting the impact of system defectsare mainly from the unreasonable promotion mechanism of local governments and excessive intervention in the allocation of key resources,as well as the orientation of the market economy of state-owned enterprises and the inappropriate industrial policies and development concepts at the macro level.As the market economy impact,it is Mainly from the the overcapacity resulting from the imbalance of economic structure,industrial concentration,homogenization of products,unsound market mechanism,and overly optimistic psychological expectations.Thirdly,through the description of the current situation of overcapacity in Hunan’s Engineering machinery industry,from the specific to the general idea,we can get the Engineering machinery industry’s current overcapacity status,development characteristics,and problems.Finally,about how to resolve the excess capacity in the Engineering machinery industry,this text gives policy recommendations based on the development philosophy of “ market-based,administrative-assisted”.