The Structural Analysis Of The Changing Characteristics Of Profit Ability And Its Influencing Factors Of The Chinese Industrial Department

The industrial economy occupies the dominant position of the entire national economy in china. The sustained and healthy development of the industrial sector is the basic guarantee of the rapid and steady growth of the national economy, and the impact of the level of performance of the industrial sector affects China’s overall economic health directly.In recent years, China’s economy is booming, the comprehensive national strength is getting stronger, and our country participates in the process of economy globalization more actively. So the competition with which the industrial sectors in China are faced is getting more and more fiercely. In this case, to improve the competitiveness of the industrial sector in China becomes particularly important. The profit ability of industrial enterprises is the core content of the industrial competitiveness, and it is related to the sustainable development of the industrial economy. In1997, the State Economic and Trade Commission, the National Bureau of Statistics and the National Commission for Discipline Inspection announced an adjusted profit ability index system to adapt to the development of the new situation, and the seven new indicators are the contribution rate of the total assets, capital maintenance and increment ratio, debt ratio, current asset turnover, cost efficiency, overall labor productivity and product sales rate. The new profit ability index system is conducive to enterprises to strengthen the financial management, and to improve the overall economic efficiency of enterprises. It can help enterprises to increase the awareness of capital preservation, and help the investors, creditors and other relevant parties to make integrated, comprehensive, scientific and reasonable evaluation of corporate financial profit ability. It is conducive to enterprises to make horizontal comparison and evaluation between each other as well. In addition, since the mode of China’s economy is in a transition period, China’s industrial sectors are facing a changing environment and internal and external conditions. On the other hand, there are many differences among China’s industrial sector and its various sectors on production characteristics and technical level, so China’s industrial economy shows obvious structural characteristics with the rapid development of economy. Promoting the economic development of the industrial sector has an irreplaceable role for the promotion of the whole national economy, in this case, grasping the relationship between profit ability and it’s influencing factors of China’s industrial sector is critical for the relevant government departments and agencies to recognize the features of development in China’s industrial sector now and in the future. Finally, it is conducive to the relevant departments to develop appropriate industrial policies and achieve the eventual rapid and coordinate development of industrial economy and the whole national economy.This article uses the panel data of sub-sectors of the China’s industry between1998and2010to evaluate the new profit ability index system (contribution rate of the total assets, capital maintenance and increment ratio, debt ratio, current asset turnover, cost efficiency, overall labor productivity and product sales rate) with principal component analysis, and regards the result as profit ability of the industrial sector. Then the article analysis the movements of profit ability in China’s industry in1998-2010in detail, and establishes the panel data model of the industrial profit ability, attempting to analysis the movements of China’s industrial profit ability from the angles of capital intensity within the industry, company size, the investment level of science and technology, the proportion of state-owned property and energy utilization. Further more, the paper.divides the31industrial sectors into four major categories:extractive industries, the chemical industry, light industry and heavy industry based on the characteristics of the various industries, and establishes the panel data model for the four major industries respectively to make empirical analysis of the movements of profit ability and the influencing factors of the four major industries.According to the empirical results of the article, there are significant structural characteristics among various industries in the movements of profit ability and the influencing factors among various industries. The characteristics are in the following;(1) The increase of capital intensity will significantly reduce the profit ability of industrial sectors, especially in the light industry sector, which means that the path of capital intensive is not suitable for China’s industrial sectors, especially for the light industry, But for the heavy industry, the increase in capital intensity will increase the profit ability of their departments.(2) There is a significant positive correlation between the firm size and the profit ability of China’s industrial sectors, and the chemical industry and light industry has showed the economies of scale, but the expansion of firm size is not conducive to the growth of profit ability of the heavy industry sector.(3) The impact of the increase in technology investment on the profit ability of China’s industrial sectors is not significant, but the impact is especially significant for the mining industry and heavy industry and not significant for the chemical industry and light industry.(4) A high proportion of state-owned property will inhibit the improvement of the profit ability of the industry, especially in the extractive industries.(5) The improvement of the energy efficiency of China’s industries, especially the chemical industry and heavy industry will improve their profit abilities.