The pain of enterprise overcapacity

Since the fall of Shi Zhenrong of Suntech Power, capital boss Wei Wenyuan was also unable to turn the tide, and announced his resignation from all positions in Sinovel on May 14; Last year, 17,000 people were reduced. At the beginning of 2013, Ni Kailu, chairman of Chaori Solar Technology Co., Ltd., left billions of debts "fleeing" rumors, which exposed the tension of Chaori Solar's capital chain. "Overcapacity" has become a serious issue that some industries have to face.

The economic stimulus plan introduced in response to the macroeconomic impact brought by the financial crisis has improved corporate profits, so the enthusiasm of corporate fixed asset investment has risen; and 2011-2012 was the peak period for the release of production capacity under the pre-investment of the industry. However, At this time, as the total economic demand declines quarter by quarter, the mismatch between supply and demand brings the problem of excess capacity to the surface.

The most direct indicator of capacity utilization is capacity utilization (capacity utilization), which is defined as the difference between the actual output in the long-term equilibrium and the optimal production capacity, is an important indicator for examining excess capacity internationally. The United States, Japan and other countries have long started to carry out industrial statistics and tracking analysis of capacity utilization indicators. It is a major monthly indicator used to reflect industrial economic strength and industrial economic trends.

According to American experience, when the industrial capacity utilization rate exceeds 95%, it means that the equipment utilization rate is close to full. When the capacity utilization rate is below 90% and continues to decline, it means that the equipment is idle more and more “overcapacity” appears. At this time, when the industrial capacity utilization rate is 81% and above, it is a normal “overcapacity”, and when it is lower than 81% , for the more serious overcapacity. Although China's National Bureau of Statistics has not compiled and published this indicator, a series of industry data still shows the grim reality of China's overcapacity.

At present, nearly 28% of the manufacturing capacity in China's manufacturing industry is idle on average, and 35.5% of manufacturing enterprises have a capacity utilization rate of 75% or below. From the traditional steel, cement and other infrastructure industries to the photovoltaic industry and other high-tech industries that represent the development direction of emerging industries in the future, there is a certain excess capacity.

In terms of traditional industries, according to the Ministry of Industry and Information Technology of China's "Report on the Operation of China's Industrial Economy in the First Half of 2012", China's steel industry has overcapacity of more than 160 million tons. Overcapacity of cement exceeds 300 million tons. In addition to traditional industries, new energy and new material industries have also begun to show signs of overcapacity.

In the recent period, emerging industries such as photovoltaics and wind power equipment have also experienced excess capacity. The utilization rate of photovoltaic capacity is less than 60%, and the utilization rate of wind turbine capacity is less than 70%. The disorderly expansion of electrolytic aluminum in the non-ferrous metal industry over the years has also led to the risk of long-term overcapacity. Its capacity utilization rate was nearly 90% in 2007. Due to its lucrative profits, it has attracted many companies to build large-scale production capacity. The result of the swarms in various places is that the capacity expansion is too fast, and the industry capacity utilization rate has dropped rapidly, which has dropped to about 65% in the past two years.

From January to September 2012, the six major energy-intensive industries invested 3.5 trillion yuan, a year-on-year increase of 22.2%, and the growth rate increased by 4.2 percentage points year-on-year. Overcapacity has caused many industries to struggle with losses. Taking the steel industry as an example, the overcapacity in the steel manufacturing industry has continued for several years. Before 2007, the crude steel capacity utilization rate was over 83%, but after 2007, the overall capacity utilization rate has dropped to a higher level and never returned to 80%. %, which is a reflection of long-term excess capacity. Similar to the steel industry, flat glass, cement, electrolytic aluminum and other industries have experienced price declines and large-scale losses due to overcapacity.

The impact of overcapacity at the corporate level, such as a decrease in corporate net interest rate, an increase in liabilities, and an increase in accounts receivable, lead to an increase in bank non-performing assets, which in turn transmits risks to the banking industry. UBS said in a report that overcapacity in the industry has put severe downward pressure on margins over the past two years. The capacity utilization rate of China's manufacturing industry in 2012 was lower than in 2008, only 70% of the level before 2007.

Since 2004, curbing excess capacity has been the focus of China's macro-control. Since then, almost every year, central policy documents to curb excess capacity have been issued. The slump in profits from overcapacity brought "deep pain" to Chinese companies in 2012 as demand slumped. In the next few years, companies in some industries will still face the painful process of "removing excess capacity".