Dynamic Monitoring Of Capacity Balance And Early Warning Of Imbalance Risk

Balanced development of capacity is the premise and guarantee for the development path of neo-industrialization.It is an important basis for improving the quality of economic development as well as stabilizing economic growth.Unbalanced capacity includes both insufficient capacity supply and overcapacity.Before the late 1990 s,the industrial economy was mainly characterized by insufficient supply of capacity,which is known as the “shortage economy”.Since the late 1990 s,capacity supply has increased together with the economic development has made great progress,which led to a risk of overcapacity.Overcapacity industries exist in traditional heavy chemical industries such as metal smelting,mineral products,and machinery and equipment as well as in some emerging industries such as wind power,photovoltaic equipment,and energy and chemical industries.The existence of overcapacity hinders the accumulation of various market factors into the real economy,especially in the industrial sector,and weakens the development of the industrial economy and the stamina of innovation.If measures are not taken in time to resolve the problem of overcapacity,it will inevitably exacerbate vicious competition in the market,causing problems such as the expansion of the industry's losses,the unemployment of industry and the increase of non-performing assets of banks,jeopardizing the healthy development of the industry and hindering the optimization and adjustment of the industrial structure.Especially after the international financial crisis in 2008,China's economic downturn pressure has increased,and the situation of overcapacity industry has gone from bad to worse Being the main form of capacity imbalance,overcapacity has developed into an important risk issue in China's transition period.Both the market's self-repairing ability and the timely and appropriate government policy intervention play the key role in preventing and defusing overcapacity risks and dynamically adjusting production capacity.A reasonable intervention policy should effectively reduce the incidence of overcapacity risks in the industry,shorten the average duration as well as weaken the overcapacity's volatility.We will monitor the dynamic change of industrial production capacity in an all-round way.Tracking its change trajectory for a long time and analyzing its characteristics and mode changes has been become an important part of macroeconomic management.Based on the above background,this paper proposes a dynamic monitoring system for capacity balance.The aim is to analyzing the law of the equilibrium change of production capacity of China's whole industrial and it's main components.In order to do this,a theoretical model based on the dynamic factor model and a monitoring index system based on the concept connotation and a dynamic monitoring index for capacity balance are established,built and compiled.This paper analyzes the influencing factors of the balance of production capacity,explores the early-warning indicators of imbalance risk,compiles the early-warning index of production imbalance risk in industrial and large-scale industries,calculates the early-warning probability,evaluates the early-warning effect,and improves the early-warning system of capacity imbalance risk.We organize the article as follows:In section 1,we provide the theoretical basis and basic concepts.We hackle the economic cycle theory,industrial organization theory and industrial relevance theory closely related to the study of the equilibrium change of production capacity.Based on the existing research,the definition,nature and form of capacity balance are given,and the series of dynamic analysis indicators such as the occurrence time,duration,incidence rate and relative scale of overcapacity risk are characterized.In section 2,we construct the dynamic monitoring system and make the empirical analysis.Firstly a theoretical model of capacity equilibrium change based on dynamic factor model has been built up.Secondly,we select observable indicators to build a dynamic monitoring index system for capacity balance.Based on the candidate indicators,the annual data of the industry from 1991 to 2016 and the monthly data of the industry as a whole and the major industries from January 2001 to September 2017 are sampled,and the PPI is used as the benchmark variable to select the time difference correlation analysis method.The set of indicators with synchronous nature eliminates the indicators that cause serious information redundancy and constitutes a dynamic monitoring target variable for capacity balance.After applying the Composite Index(CI),Diffusion Index(DI)and Stock-Watson Index to compile the dynamic monitoring index of capacity balance,we depict the dynamic process of the equilibrium change of industrial capacity in China,and analyze the dynamic characteristics such as time and duration,relative scales and possible tendency.Further discussion concerning the capacity equilibrium dynamic monitoring index and macroeconomic cycle synergy are carried out in the end of this paper.In section 3,we analyze the influencing factors of the balance of production capacity and construct the early-warning indicator system for imbalance risk.The market factors,nonmarket factors,influencing factors and investment factors are analyzed in depth,and make them together with observable statistical indicators in order to build the unbalanced risk earlywarning indicator system.In section 4,we make the early-warning analysis of production imbalance risk.Firstly,we optimize the Harding-Pagan turning point recognition algorithm and then put it to identify the capacity balance monitoring index.Secondly,the early-warning index system constructed in Chapter 4 is verified,and the early-warning index is compiled.The Harding-Pagan identification result is used as the dependent variable to estimate the early-warning probability by Probit model,and the high-risk threshold is given.Finally,the early-warning effect and marginal effect of indicators is evaluated and analyzed.In section 5,we apply the dynamic monitoring to capacity in typical industries and make the early-warning of imbalance risks.This part takes 12 typical two-digit industries as an example to carry out dynamic monitoring of capacity balance and early-warning analysis of imbalance risk.In terms of monitoring and analysis,the dynamic characteristics of the occurrence,incidence,average duration,maximum depth and relative depth of overcapacity risks in typical two-digit industries,as well as the periodic synergy between typical industries are analyzed in details.The typical problems in the imbalance of production capacity are discussed.The fixed effect panel model and the panel Probit model are established respectively to analyze the realistic performance of the investment “surge” phenomenon.This part is the promotion and extension of the production level equilibrium dynamic monitoring and imbalance risk warning research at the industry level.The analysis of the characteristics of the industry characteristics of overcapacity risk,the analysis of the stage characteristics and the discussion of the phenomenon of “investment surge” have played a certain role in summarizing and upgrading which improves the capacity balance monitoring and early-warning research system.The main conclusions:Firstly,the monitoring and analysis of the equilibrium changes in China's overall industrial production capacity show that: The incidence of overcapacity risk for 3 consecutive months and above was 33.84%,and the incidence rate for consecutive 6 months and above was 20.2%.From January 2001 to September 2017,there were four recessions,including two mild cases from July 2001 to February 2002 and September 2014 to March 2015.From September 2008 to August 2009,the average decline depth is as high as 214.33%,and the valley depth is 718.13%,the forth is from September 2011 to September 2012 and it lasts for 13 months which is the longest one.The 2008 global financial crisis has had a huge impact: the major industrial economic indicators fell sharply,the industrial economic growth rate shifted significantly,and the negative impact on the growth of industrial economic growth is obvious.After the crisis,the basic performance characteristics of capacity balance change recovered.The specific time and depth of overcapacity returned to the pre-crisis level,but the average period length increased,and the capacity balance changed into a low-fluctuation,wide-cycle model.Secondly,industry overcapacity risk occurrence characteristics have significant heterogeneity,the risk of overcapacity for 3 consecutive months and above ranges from 3.24% to 52.3%,with an average duration from 3 months to 11.3 and the average depth is from 23% to 417.8%,which shows a serious structural imbalance,and this has become a huge obstacle to china's industry.Thirdly,from the study on the productivity monitoring index of large-scale industries,we find that the risk of overcapacity has multi-source characteristics.Industry characteristics have a significant impact on the risk of overcapacity.Those industries with high price impact correlation,high investment relevance are apt to low incidence of overcapacity and vice versa.The risk of overcapacity in the industry entering the mature stage of the industrial life cycle is about 6 percentage points higher than other industries.The economic cycle affects the severity of overcapacity in the industry and the extent of excess,especially affected by the external negative impact of the 2008 global financial crisis,overcapacity in most industries has been severely magnified and deepened.Some industries have reached more than 700%,and the degree of spread has increased by 15% compared with pre-crisis.With the deepen openness degrees,the connection with the global economy becomes increasingly close,and the external influence will be gradually increased.The overcapacity period from September 2011 to September 2012 could be led by “four trillion”strong stimulus program,which possess the characteristics of policy intervention.Fourthly,The analysis of the periodic synergy and phase characteristics of the productivity fluctuations among large industries shows that: Enhanced period synergy of inter-industry capacity balance changes after the 2008 global financial crisis,the tender movement of capacity balance coexist with the general characteristics of industry decline Industries' ability to resist shocks are weaken,which needs to accurately grasp the time and intensity of regulation and control policies to avoid negative effects of policy intervention.Fifthly,Early-warning research on the imbalance risk of industry and large-scale industries shows that: Macroeconomic policy uncertainty and inter-industry transmission play an important role in the accurate warning of industrial production imbalance risks.With the smooth flow of information transmission channels and the acceleration of industrial integration,The role of statistical indicators which representing future transmission characteristics between industries may be further strengthened.Increasing the indicators that represent the interindustry transmission in the early-warning of the imbalance of production capacity and even the early-warning analysis of the macroeconomic cycle will greatly improve the early-warning effect.The relative growth rate of fixed asset investment constructed in this paper for investment “surge phenomenon” has a significant negative impact on the equilibrium change of industry capacity,indicating that the industry's irrational investment will significantly increase the risk of overcapacity.The article is innovative in three ways:1.In this paper,a dynamic monitoring system of capacity balance based on dynamic factor model is constructed,which gives a new interpretation framework and analysis path for statistical monitoring of capacity balance.Taking the concept of capacity balance as the starting point of research,this paper builds a theoretical model and constructs a monitoring index system,makes the changes in common components of observable indicators as targets for capacity balance monitoring,and uses the Stock-Watson Index Method based on dynamic factor model as compile capacity equilibrium dynamic monitoring index.This paper's focuses on dynamic changes makes up for the lack of systematic lack of traditional one-index research one-sided and multi-index research,which endows a new interpretation framework and analysis path for capacity balance statistical monitoring.2.Exploring important early-warning indicators and improving the early-warning indicator system for capacity imbalance risksThis paper digs out the economic policy uncertainty index from the influencing factors of capacity equilibrium change,and incorporate the growth rate of fixed assets investment and the relative growth rate of fixed assets among related important industries into the early-warning index system of production imbalance risk.The empirical results show that the three aspects of early-warning indicators have positive significance for improving the early-warning effect of imbalance risk.3.Improvement of the turning point identification methodThe identification of turning points is an important part of time series analysis,and it is a key issue in calculating the probability of early-warning of imbalance risk,which is directly related to the quality of early-warning.The improvements to the Harding-Pagan method superimpose limits on fluctuation amplitude and peak and trough alternative point position limits,which can effectively control noise,accurately locate and identify the risk of overcapacity and fell in line with reality and research purposesThe policy recommendations in this article focus on the following areas:Firstly,it is necessary to strengthen the dynamic monitoring of industrial production capacity balance and early-warning of imbalance risks;Secondly,we must pay attention to rational matching and use of counter-cyclical policies;Thirdly,we should adjust and optimize the scale and structure of investment,and timely stop and contain irrational investment of enterprises and finally,we must eliminate backward production capacity in an orderly manner and establish and improve industrial adjustment support policies.