Dissolve excess capacity may choose to China

Success of landing the nyse, from 2005 to 2008 had become the world's largest silicon components manufacturer, suntech power use three years time. And then in less than five years,cold drawn carbon steel pipe its suntech because of capital chain rupture in the filed for bankruptcy protection earlier this year. Once solar empire collapsed.The solar industry is the epitome of excess capacity in China. Under the background of continued weakness in domestic and international market demand, China's iron and steel, cement, electrolytic aluminium, flat glass, ship industry such as accumulation of excess capacity has sparked concern increasingly.

Data show that at the end of last year,3D eblow Carbon Steel pipe fittings China's iron and steel and other industries with excess capacity utilization on average around 75%, significantly lower than the international usual. In the first half of this year, the national industrial enterprises above designated size nearly 22% of the unused capacity.Some of these excess industry into loss mire, some can only earn a small profit. Had the image of the iron and steel industry the situation described in the first half of this year's profit: sell a ton of profits is not enough to buy a Popsicle.

The national development and reform commission,45 degree short radius pipe fitting elbows the academic committee secretary general Zhang Yansheng blame China for the past few years this round of excess capacity to excessive investment and foreign trade. This led to a major equipment industry, traditional labor-intensive export industry, strategic emerging industry presents the bubble growth, rising global demand, domestic costs and other factors, such as Europe and the United States withdrew, formed a huge spare capacity.

"China over the past decade to form foam capacity pressure is very big,high-frequency ERW carbon steel tube it is difficult to through any kind of stimulus to settle." Zhang Yansheng said.Sino-euro lujiazui international financial institute executive vice dean Liu Shengjun pointed out that lead to high investment is one of the most important factor is the distortion of the price of factors of production. "China's labor costs, environmental resources price, land price, the price of capital to a great extent, are distorted. Companies able to get cheap factors of production, will, of course, the big investment." He said.

In the context of China's economic growth is sluggish, dissolve excess capacity to become one of the government to solve the problem. Premier li keqiang said many times this year, to resolutely curb severe overcapacity blind expansion of the industry.

Chinese zheng xinli, vice executive director of the center for international economic exchanges, high-level thinking is through the "four of a batch of" eliminate the contradiction between last for years. Through expanding domestic demand to digest a batch, the implementation of the strategy of "going out" to transfer a batch, overseas mergers and reorganization to integrate a batch of, access to an unspecified number of strict environment protection, etc.

Released in July following the first batch of ironmaking, steelmaking, papermaking, cement and other industries backward production capacity after the list of companies, the ministry of industry and information technology again in early September list released the second batch of enterprises, involving 67 companies across the country. But the ministry minister MiaoWei acknowledged that new capacity far greater than the speed of the backward production capacity speed.