An example of overcapacity

On March 8, 20 14, China People's Political Consultative Conference held a proposal consultation meeting with the theme of "Give full play to the decisive role of the market and better play the role of the government to actively resolve overcapacity".

Of the approved proposals, 47 are related to overcapacity. There are still some proposals that have not been considered, and it is estimated that there will be more than 50 proposals related to production capacity. China's industrial overcapacity is serious, with 22 industrial overcapacity, and the industrial overcapacity rate exceeds 80%, especially steel, cement, electrolytic aluminum and flat glass. By the end of 20 12, the capacity utilization rate of these industries was seriously lower than the international common level. Local government intervention promotes blind investment.

Wang Zhiliang, Chairman of Hong Kong Liwan Group Co., Ltd.: An important reason is government intervention and blind investment promoted by local governments. The investment impulse of enterprises and the political achievements impulse of local governments make the investment behavior in some fields irrational. Many places are keen to attract investment with preferential land and tax policies, which leads to repeated layout and planning convergence, making the risk of potential overcapacity in the short and medium term more prominent.

Overheated performance appraisal dislocation in attracting investment.

Li Shu, Director of China General Technology Group: Just now, everyone mentioned the assessment system. While reducing the GDP assessment system, the assessment of grassroots cadres should also reduce the requirements for attracting investment and increase the transformation index. We often go to the provinces to find projects and find that the provinces are very enthusiastic about attracting investment. (We) are surrounded by local officials every day, and even the mayor and deputy mayor follow you. Do you have so much information to confess? I think this is a dislocation. Let Hebei Glass Factory do a good job in environmental protection.

Cao, Executive Director of Fuyao Glass Industry Group: One of the motives for resolving overcapacity is to manage the environment. The main cost of glass is fuel. The glass in Hebei is made from coal coke. They not only evade taxes, but also don't install environmental protection facilities. One ton can be sold at 1200, and our cost will be 1400. It is these people who brought down the glass market in China. Standards and assessment are not unified, and we suffer. I suggest to further investigate those glass factories in Hebei and let them do environmental protection and desulfurization and dust removal. Otherwise, I dare not compliment. Liu Kun, Vice Minister of Finance: Your opinions are very good, and we will implement them in the next step. This is our position. The contradiction of overcapacity in China has little to do with the market cycle. In order to solve this problem, the Third Plenary Session proposed that the market should play a decisive role in resource allocation and give full play to the role of the government. The Ministry of Finance will seriously study and organize the implementation according to the suggestions, and strive to force enterprises to resolve excess capacity through fiscal and taxation policies, so as to achieve the goal of treating both the symptoms and the root causes.

Qian Guanlin, former deputy director of State Taxation Administration of The People's Republic of China: 20 13 The Ministry of Environmental Protection punished a number of enterprises. According to some calculations, the average fine of each enterprise is only 60,000 yuan, so enterprises have a strong impulse to steal. Eliminating backward production capacity has no effect at all, but also plays a protective role. Our legal standards should make enterprises bear all environmental responsibilities and implement strict supervision.

Deng Xuan, member of the Central Organization Department: From the perspective of the Central Organization Department, 20 13 issued a document to evaluate the improvement of the leading bodies of local governments. The core is to stop using GDP to talk about heroes. Increase the assessment weight of indicators such as resource consumption and environmental protection. Cadres who violate scientific development should be held accountable, cadres who develop scientifically should be loosened, and cadres who violate the rules should be cursed. The next task is to establish Scientific Outlook on Development in the education and training of cadres. When selecting cadres, adhere to the implementation of assessment. Interview and adjust the leaders who violate the rules. Introduce policies to realize the lifelong system of "three-faction cadres".

Li, former Minister of Industry and Information Technology: Overcapacity is a common phenomenon. So don't hide anything, but admit the reality and solve the problem. I agree with the drastic measures taken by the National Development and Reform Commission and the Ministry of Industry and Information Technology, such as steel, cement and electrolytic aluminum. Is it cruel that the capacity expansion in recent years has not been approved?