A New Way To Solve China’s Manufacturing Overcapacity:Empirical Study Based On The Perspective Of Foreign Investment Opening Policy

Since the reform and opening up,my country’s economy has developed rapidly,but at the same time,structural problems have become more and more prominent,and the overcapacity is the deep-seated problem.The serious problem of overcapacity has greatly reduced the overall economic benefits.It poses a challenge to the long-term and sustainable development of China’s economy.Since China’s economic development has entered the new normal,it has become more critical to transform the economic development model and ensure high-quality economic and social development,and reducing overcapacity has become one of the main goals of China’s supply-side structural reform.This paper selects my country’s relaxation of foreign investment control in 2002 as a quasi-natural experiment,and systematically explores the impact and transmission mechanism of foreign investment opening policy on manufacturing capacity utilization through the method of double difference.The research results show that the opening of foreign capital has effectively improved the capacity utilization rate of domestic enterprises in the same industry.This paper also examines the relationship between the two from the perspective of upstream and downstream forward and backward correlation.It is found that in addition to the horizontal spillover effect of foreign investment in the industry,domestic enterprises also obtain positive forward flow from foreign investment in upstream and downstream industries respectively.The effect of backward correlation and backward correlation has significantly improved its own capacity utilization rate.Finally,this paper further examines the impact of foreign investment opening policy on the overall capacity utilization rate of the manufacturing industry,and finds that foreign capital opening significantly promotes the growth of the overall manufacturing capacity utilization rate through the channel of resource reallocation.The main innovations of this paper lie in the following three aspects: First,from the research perspective,this paper further studies from the perspective of forward and backward correlation on the basis of examining the impact of FDI industry spillovers on the capacity utilization rate of domestic enterprises,which makes up for the previous literature from a single perspective.The limitations of studying the impact of foreign capital opening on capacity utilization;secondly,in terms of identification strategy,this paper uses the double-difference method to conduct empirical research,which helps to overcome the possible endogeneity problems in the model.Compared with existing literature,it can be obtained.More reliable research conclusions;in addition,this paper deeply examines the mechanism of foreign capital opening affecting the capacity utilization rate of domestic enterprises from multiple dimensions,and further studies the impact of foreign investment opening policy on the overall capacity utilization rate of the manufacturing industry at the industry level,and finds that The opening of foreign capital has significantly promoted the growth of the overall capacity utilization rate of the manufacturing industry through the channel of resource reallocation.In general,this paper explores the problem of overcapacity from a new perspective of the foreign investment opening policy,which has important implications for solving the dilemma of overcapacity and realizing the policy goal of "cutting overcapacity" under the new normal.