AModeling Analysis of Local Governments Competing in Offering Subsidies to Attract Investment：the Cause of Industrial Overcapacity]

Although championed by academia and policy-makers, the theory of ＂wave phenomenon＂ is a questionable explanation for overcapacity. First, enterprises do not necessarily share the same expectation for future demand of a promising industry. Second, in its model, overcapacity is explained as a deviation from equilibrium under the incomplete information hypothesis, which is in fact nothing but normal in a market economy. The prime reason for overcapacity resides in the fact that local governments are engaged in a subsidy competition to attract investment. We endeavor to illustrate the following via modeling： the subsidy effect produced by local government＇s offering of cheaper land and matching loans results in less investment from companies. Under this circumstance, enterprises channel a disproportionate amount of funding to building production capacity, which overloads the entire industry. To address the problem, reforms are needed in land property, environmental protection policies, and financial and fiscal systems.

Market-Based Solutions to Overcapacity：Principles and Measures

This paper takes stock of theoretical economic analyses of overcapacity,reveals the factors that induce actual capacity to deviate from market equilibrium, examines market-based mechanisms to resolve overcapacity, and identifies long-term mechanisms and assurances for market-based solutions to overcapacity. Given the limitations of market mechanism and the government's role, neither the market nor the government is able to resolve the problem of overcapacity on its own. In resolving overcapacity, market and the government should play their respective roles rather than replace one another. While the market is a dominant force in regulating capacity and achieving supply and demand equilibrium, the government should provide institutional assurances for effective market operation. Market-based solutions to overcapacity require the government to provide institutional assurances and create a system where market entities decide to enter and exit the market under effective restraints and incentives with a clear boundary.

Resolving Overcapacity

ratify the Paris Agreement on combat ing climate change. It was often felt, especially by developing nations, that there was a conflict between the requirement to lower greenhouse gas emissions and legitimate aspirations to industrial development in order to catch up with the developed world.

Project Matching and Overcapacity in China

Based on the features of China's project investment,we consider the formation of production capacity as a matching behavior between local governments and investment enterprises.Using the search and matching model,we illustrate that the excess capacity in China mainly results from the asymmetry between the gains from and contribution to the project matching:The capacity will be excessive when the proportion of local governments' return exceeds its contribution to the project,and the more unbalanced the return-contribution relationship,the more severe the overcapacity.Meanwhile,we test this theoretical prediction based on a quasi-natural experiment:the reform of administrative approval system.The empirical results show that the reduction of the local governments' return-contribution ratio will significantly raise the capacity utilization rate and mitigate the overcapacity.Industry-specific regression results further indicate that governments' return-contribution asymmetry is more prominent in industries dominated by state-owned enterprises,high-monopoly industries,heavy industries,and industries with serious overcapacity.This paper offers a novel mechanism of overcapacity,a theoretical criterion for judging optimal capacity,and some new regulatory tools with the micro foundation.

Does overcapacity prompt controlling shareholders to play a propping role for listed companies?

A major risk currently facing the Chinese economy is overcapacity,which affects the efficiency of social resource allocation(Xi et al.,2017;Huang et al.,2019).When a company is in crisis,the internal capital market often plays a propping role.This study approached this issue from the perspective of the controlling shareholder and examined whether controlling shareholders provide financial support to enterprises in industries with excess capacity.According to the data for China’s A-share listed companies from 2007 to2019,companies in industries with excess capacity received more financial support from controlling shareholders compared with those in non-overcapacity industries.Analysis of the mechanism revealed that state-owned enterprises and companies with relatively poor financial status received more financial support from controlling shareholders.This study also examined the economic consequences of such support and found that it is conducive to enhancing enterprise value.This study enriches the literature on overcapacity and internal capital markets by demonstrating that internal capital markets play a propping role for companies facing industry-level crises.This finding has both theoretical value and practical implications related to supply-side reform and capacity reduction.

Addressing Industrial Overcapacity

China vows to exert tougher restrictions on excess capacity and redundant construction Enterprises looking to invest in the steel, cement or plate glass sectors will find it difficult to establish operations. The government is saying "no" to any expansion into these industries.

Clampdown on Overcapacity

Zhu Yimin had hoped to get his planned ironworks going after the Spring Festival. He did not expect the local government to turn down his application. Municipal government officials told him that as per current regulations, a blast-furnace for smelting iron of less than 100 cubic meters could not be approved and even existing ones would be closed down. Located in central China, Gujiao City of Shanxi Province has not only

Aluminum Expansion Approaches The Inflection Point,With The Core Of A New Round Of Overcapacity Cutting As Self-Built Power Plants

Shandong Development and Reform Commission recently announced in a documen that based on the enterprise self-inspection and provincial inspection results,it had ordered Shandong Weiqiao Pioneering Group and Xinfa Group to close 3.21 million tons o illegal aluminum production capacity by the end of July.Besides Shandong,other provinces and regions with high aluminum

A Qualitative Appraisal of China’s Efforts in Fishing Capacity Management

This paper provides a critical review of some major efforts made by China to manage the fishing capacity of its marine capture fisheries. It begins by reviewing the key concepts and issues closely related to fishing capacity management. Following on this, a brief introduction to China’s marine capture fisheries is offered, especially the trends of its marine landings and marine fishing fleets and the status of fish stocks in waters under its jurisdiction. Next comes the main concern of the paper, i.e., some major actions recently initiated by China to deal with the overcapacity problem confronting it. The paper ends with conclusions and suggestions.

Systematic Optimization of China's Manufacturing Industrial Structure

Using China's two-digit manufacturing sectors as samples, this paper first analyzes China's output structure optimization objectives and energy conservation and emissions abatement potentials in 2015, then examines various factor inputs' matching, and estimates their capacity utilization status, focusing on capital stock factor. Results of our study suggest that:(1) China's manufacturing output structure has great potentials of optimization to reduce energy intensity and carbon intensity by 18.08% and 17.42% respectively over the original values;(2) to reduce factor mismatch, various supporting input factors need to be introduced after manufacturing output structure optimization. The level of capital stock, in particular, requires a substantial change;(3) China's manufacturing capacity utilization(56.14%) in 2015 was far below its average level(73.27%) in the mid and late stage of the 11 th Five-Year Plan period(2008-2010). The low capacity utilization was attributable to economic slowdown and investment inertia. After input factor matching, capacity utilization may rise to the latter level.

Research on transformation and upgrading of traditional manufacturing industry under the background of reducing capacity

In today＇s economic situation, overcapacity of Chinese traditional manufacturing industry poses a serious threat to sustaineck rapid and healthy development of economy. The primary reasons of excess capacity of Chinese traditional manufacturing industry are the discordant between consumption and investment, the irrational industrial structure, export is not ideal and other causes. Overcapacity of traditional manufacturing industry will lead to business failures, unemployment citizen, deflation, financial risk and other series consequences. We should learn from foreign experience in the processing of excess capacity of traditional manufacturing industry and deal with excess capacity of traditional manufacturing industry in different aspects, so as to ensure stable and healthy development of our country＇ s economy.

Existing contradictions and problems in China’s current economic and social development

Since the 18th National Congress of Communist Party of China(CPC),China has made important achievements and headway in economic and social development.However,now more than ever the focus should be on the conflicts and problems that continue to exist in China’s economy.This paper examines six of them:(1)lack of a firm foundation for sustaining steady economic growth;(2)risks and hidden dangers in the financial,banking,and real estate sectors and massive overcapacity in some industries;(3)increasing difficulty in increasing agricultural production and raising rural incomes;(4)severe air,water,and soil pollution in certain regions and the arduous task of energy conservation and emissions reduction;(5)major structural problems constraining employment;and(6)issues of people’s livelihood that have been the source of dissatisfaction for many Chinese citizens.