Why go to production capacity?

Question 1: Why is there an economic cycle of de-capacity? Especially in 2006 and 2007, China enterprises increased a lot of finished products or raw materials inventory, and even expanded investment and purchase machinery and equipment. Due to various reasons such as rising raw material prices, good export situation and promising profit prospects of enterprises, their production capacity was greatly expanded. In the second half of 2008, the international and domestic macroeconomic situation turned sharply, and these stocks were formed. Only by digesting these stocks in 2009 can enterprises regroup and move on, and the economy can return to the growth track.

CICC divides inventory and destocking into two categories, namely, narrow-sense inventory and broad-sense inventory, and correspondingly there are narrow-sense destocking and broad-sense destocking. CICC report pointed out that destocking in a narrow sense only refers to reducing the inventory level of products, such as reducing the inventory of raw materials by enterprises, which may be realized soon. However, its impact on the economy cannot be exaggerated. This is because: First, China has experienced destocking in a narrow sense in the past. For example, in 2005, enterprises reduced their inventory level, but during this period, the economy did not decline sharply, and the GDP growth rate continued to rise; Second, the proportion of inventory changes in China's GDP has undergone structural changes since 2000, which has dropped to about 2. 1%, far lower than the levels of 1980 to 1990 before 2000, reflecting that the inventory management level of enterprises has been greatly improved due to scientific and technological progress, and this trend has also decreased. Therefore, it is not appropriate to simply blame the current economic downturn on destocking.

CICC report pointed out that the process of generalized destocking, that is, digesting excess capacity, will not end soon. In recent years, the production capacity of most industrial products in China has expanded several times. The production capacity under construction in 2007-2008 is still huge and will be gradually released in the future. The seriousness of this overcapacity can be seen from the macro-level imbalance between investment and consumption. China's investment rate (the ratio of capital formation to GDP) has been rising to 43% in recent years, which is not only far higher than China's own average of 38% in the past few years, but also far higher than the peak level of other countries. On the contrary, the consumption rate in China has been declining, from an average of 59% over the years to about 50% at present, even lower than the normal level in other countries (about 70%). Excessive investment and insufficient consumption make it take longer and more painful to digest excess capacity than to destock in a narrow sense.

Question 2: The latest information about why steel has to go to production capacity is mainly that there is too much overcapacity. If the excess capacity is not removed, it will be a waste. Everyone can only make a living by producing low-grade products, which has caused great waste of resources and potential safety hazards to people's lives and property. At present, China's steel production capacity is 65.438+0.26 billion tons, consumption is 850 million tons, export is 65.438+0.40 billion tons, and the overcapacity is 270 million tons. The long-term high profits and strong * * * of China steel industry lead to excessive and rapid expansion of production capacity. Even farmers, cotton mills, sesame oil sellers, steel structure and steel traders, village heads and mayors all invested in steelmaking, and the factory directors of steel mills all collected junk, which led to the whirlwind growth of steel production capacity for decades, reaching 65.438+0.2 billion tons. This serious overcapacity situation in the steel industry has led to a decline in prices. Due to fierce competition and low efficiency, disorderly expansion has not stopped and backward production capacity has not been eliminated. The steel industry shows no signs of recovery. Even if it is restored for a period of time, it will be offset by the small steel that will be revived immediately, and the quality of construction projects and the safety of ordinary people will ultimately suffer. The only thing the country needs to do is this-all steel mills built in the past 20 years will be demolished without approval.

Question 3: How to understand the Prime Minister's remarks about 20 17 capacity reduction, just like the article I read on China Clearing Network. . Do you need this article?

Li, a reporter from Economic Observer Network, "This year, we will reduce the steel production capacity by about 50 million tons and withdraw from the coal production capacity by more than 654.38+500 million tons. At the same time, it is necessary to eliminate, stop construction and delay the construction of coal-fired power capacity of more than 50 million kilowatts. " This is the statement of the target and task of capacity reduction in 20 17 years in the work report of Premier * * * this morning.

What is the concept of this passage? By comparison, we can improve our understanding of this set of figures. In this year's * * * work report, Prime Minister * * * reviewed the achievements of capacity reduction in the past year: 20 16. "Focusing on capacity reduction in the steel and coal industries, the annual steel production capacity exceeded 65 million tons and the coal production capacity exceeded 290 million tons, exceeding the annual target and tasks, and the diverted workers were better placed." Comparing the actual completed tasks in 20 16 with the target tasks in 20 17, it can be seen that the tasks of de-capacity in 20 17 decreased compared with the previous year, especially the tasks of coal de-capacity decreased by nearly half.

However, if compared with another set of data, it may be found that the target task of capacity reduction this year is not small. In last year's work report, Premier * * * also reviewed the past achievements in capacity reduction, but mentioned steel, cement, flat glass and electrolytic aluminum, but did not mention coal. At that time, it was said: "In the past three years (that is, 20 13-20 15), more than 90 million tons of backward steelmaking and ironmaking capacity, 230 million tons of cement, more than 76 million weight boxes of flat glass, and more than 0 million tons of electrolytic aluminum/kloc-0." That is to say, from 20 13 to 20 15, the average annual steel production capacity is only over 30 million tons, which is not only much less than that of 20 16, but also only half of that of 20 17. It can be seen that the task of de-capacity of 20 17 steel and coal is still very heavy.

In addition, we should pay attention to the overcapacity of coal-fired power that was not mentioned in previous years, which was specifically mentioned in this year's work report. The specific expression is "eliminate, stop construction, delay the construction of coal-fired power capacity of more than 50 million kilowatts, prevent and resolve the risk of overcapacity in coal-fired power, improve the efficiency of coal-fired power industry, and make room for the development of clean energy." The average coal consumption per kilowatt-hour is about 0.33 kg, which means that the potential coal consumption will be reduced by about160,000 tons in 20 17 years.

In order to ensure the concrete implementation and promotion of the work of de-capacity this year, Premier * * * requested in his work report: "We should strictly implement relevant laws, regulations and standards on environmental protection, energy consumption, quality and safety, make more use of market-oriented legal means, effectively dispose of' zombie enterprises', promote enterprise mergers and acquisitions and bankruptcy liquidation, resolutely eliminate backward production capacity that does not meet the standards, and strictly control new production capacity in surplus industries. To reduce production capacity, employees must be properly placed, and the central government's special award funds should be allocated in time. Local governments and enterprises should implement relevant funds and measures to ensure that diverted employees have a way out and a guaranteed life. " The key words involved in this paragraph are "zombie enterprise", "strictly control new production capacity" and "employee placement". For the problem of staff placement, in addition to timely disbursement of funds at the central level, local governments and enterprises are also required to implement relevant funds and measures to ensure that the problem of staff placement can be solved.

In the 20 17 work plan for capacity reduction, in addition to the aforementioned "digital target", there is also a "zombie enterprise" that has to be paid special attention to. In the work reports of * * * in previous years, the disposal of zombie enterprises was not stated in the task of de-capacity, but it was highlighted this year. The specific expression is: "More market-oriented legal means are used to effectively deal with' zombie enterprises' and promote mergers and acquisitions and bankruptcy liquidation of enterprises." In fact, the central government highlighted the disposal of zombie enterprises. As early as a few days ago, at the meeting of the Central Financial and Economic Leading Group, it was clearly stated that "to further promote the de-capacity, we must seize the' bovine nose' of disposing of zombie enterprises." What is certain is that in 20 17 years, the disposal of zombie enterprises will become one of the important tasks of de-capacity.

Question 4: Why did the Central Economic Work Conference go to production capacity? This is because during the economic cycle, especially in 2006 and 2007, China enterprises increased a large number of finished products or raw materials inventory, and even expanded investment and purchase of machinery and equipment. Due to various reasons such as rising raw material prices, good export situation and promising profit prospects of enterprises, their production capacity was greatly expanded. In the second half of 2008, the international and domestic macroeconomic situation turned sharply, and these stocks were formed. Only by digesting these stocks in 2009 can enterprises regroup and move on, and the economy can return to the growth track.

Question 5: Why do we have to go to overcapacity?

Question 6: Instead, it is necessary to limit production. If we don't understand why we should cut production capacity, we should look at limiting production, because overcapacity, coupled with reduced demand, leads to a decline in steel prices, which in turn affects the profits of the steel industry.

On the other hand, if the output is limited, the demand for raw material iron ore in the steel industry will also shrink, which can reduce the price of iron ore to some extent.

It's purely personal.

Question 7: What do you mean by de-capacity? There is too much production capacity, so we need to consume some. Reach a certain balance

Question 8: How to explain the decrease in production capacity?

Question 9: Why is "de-capacity" the key to China's economy? Because China's economy is just blowing soap bubbles, attracting foreign investment by high growth and supporting internal crazy investment by printing money, China has been issuing more money or even exceeding it for many years. The growth of M2 money supply in China has remained above 15% for many years, and even soared to nearly 30% in 2009. No matter from which angle and standard analysis, it is unsustainable, and it also directly or indirectly contributes to the property market bubble. Domestic currency issuance is different from the US and European versions of QE monetary easing policy. In the United States and Europe, debt issuance is conducted through open market operations, while in China, a large number of loans are semi-compulsory through mainland banks. For example, the 4 trillion * * measures in 2009 made mainland banks grant loans again, so wealth flowed into the hands of a few "own people" in the name of investment.

When the capital flows away, the bubble of RMB spamming will burst, so we have to "go to production capacity", use subsidies to support "our own people" and kill competitors in other markets. On the one hand, it can make up for its own wealth, and it can also recycle excess RMB to support the exchange rate.

Question 10: What should employees who have lost capacity do? Internal resettlement, external transfer, support for entrepreneurship, retreat and public welfare posts "support".

How to resettle employees after de-capacity? The reporter's investigation found that there are mainly the following channels:

-Internal placement. The reporter found that at present, by adjusting the product structure of enterprises and supporting enterprise restructuring, all localities encourage the internal transfer and retention of surplus employees as the main channel for employee placement. By the end of last year, the adjustment of industrial structure in Hebei Province involved 510.8 million employees, of which 248,700 were transferred and retained within enterprises, accounting for nearly half.

-External transfer. A person in the social security industry said that de-capacity involves the resettlement and diversion of employees, especially the closure of bankrupt enterprises. Social security, trade unions and other departments need to actively organize special job fairs to seamlessly connect talent-demanding enterprises with de-capacity enterprises to help employees transfer jobs. In addition, relevant departments actively organize entrepreneurship skills training and guidance, coordinate small-scale entrepreneurship loans, and encourage willing and skilled employees to start their own businesses.

It is reported that in recent years, WISCO Group has jointly organized special job fairs with labor and trade union departments on the basis of arranging some employees to work in the local area in the early stage. At a job fair at the end of February alone,1more than 500 employees reached employment intention agreements with other enterprises. Tianjin has arranged 654.38+0 billion yuan to subsidize 80% to 6543.8+0.000% of the training fees for enterprise employees to participate in vocational training.

-Retirement and public welfare jobs are "bottoming out". Zhang Liqun, a researcher at the State Council Development Research Center, said that some people who are facing difficulties in retirement and employment should be "supported" through internal retirement and providing public welfare posts.

According to a person in charge of a state-owned enterprise, according to relevant policies, employees who are less than five years away from retirement age can resign and rest after their own application and approval by the enterprise, and the enterprise will provide living expenses and pay social security. Employees who have retired for more than 5 years, are older, lack skills or have disabilities are recommended to apply for public welfare posts.

There is more employment space, and the duty of * * * is to guide and "cover the bottom"

At the G20 Finance Ministers' Meeting not long ago, Finance Minister Lou Jiwei said that in the process of de-capacity, China has the budget to give laid-off workers enough support. There are still many authoritative figures attending the meeting who believe that, apart from the financial backing, the employment pressure brought by this round of de-capacity is not great, and the rapidly developing tertiary industry in China is likely to absorb workers from industries with overcapacity.

I hope this helps.