| Since 1990s, China’s manufacturing industry has gradually emerged excess capacity. Long term excess capacity will not only affect the micro economy, distort corporate behavior, resulting in waste of resources, but also have a negative effect to the adjustment of industrial structure and industrial upgrading. In recent years, the state issued a series of policies and measures, increase the intensity of the governance of excess capacity, however, overcapacity situation has not been fundamentally changed, strengthening research on excess capacity still has practical significance. After the reform and opening up, the promotion mechanism of China’s officials gradually evolved from the pure political assessment to economic growth as the main standard of assessment. In this incentive mechanism, local officials in order to maximize their own interests and to enhance the political competitiveness, gradually put the investment as the main driving force of economic growth. Due to the government and enterprises can get benefit by collusion and enterprises to increase investment can often obtain financial subsidies and tax breaks, thus resulting in some enterprises blindly over investment, then promoting the excess capacity. This paper, on the basis of measuring China’s manufacturing capacity utilization, comparatively analyses the capacity utilization rate of China’s three major regional, and analyzed the mechanism of the official promotion system on overinvestment and excess capacity and from theoretical and empirical aspects, at last provide dec is ion-making reference for the government to formulate inhibits the production of excess policy.Firstly, the paper measures the situation of China’s manufacturing capacity utilization, and analyzes the fluctuation trend of manufacturing capacity. This paper selects the panel data of 30 provinces (except Tibet) from 1999 to 2013, and uses the cost function method to quantitatively analyze the capacity utilization, and has carried on the contrast analysis. The study founds that various provinces have different degrees of overcapacity, and only a few provinces’change of the capacity utilization rate is consistent with the overall change tendency, and the country’s economic cycle does not represent a region’s economic cycle, then affect factors for the whole country is not necessarily for all provinces.China official promotion and performance evaluation system have a significant influence on the local government and the investment behavior of enterprises, leading to overinvestment and overcapacity. The paper, based on the analysis of local official performance evaluation mechanism and promotion system that impact on investment behavior and mechanism of excess capacity on the action mechanism, puts forward a series of theoretical hypothesis which explain the mechanism among the official promotion, excessive investment and manufacturing overcapacity. Then, this paper using the classical intermediary model analyzes the intermediary effect of over investment on promotion of local officials and overcapacity. Finally, the difference effect of each variable on the capacity utilization was studied in the sub region. Results show that the position of local officials that have taken place will increase the degree of over investment, and excessive investment and capacity exist positive correlation; from the point of the country, over investment to the official promotion and excess manufacturing capacity has an intermediary effect; excessive investment in the eastern region has the weakest mediating effect of official promotion and capacity utilization rate, the influence of multiple variables on capacity utilization in the central region is different from other regions, and the intermediary effect of excessive investment in the western region is most obvious, namely excessive investment mediates the effect of the official promotion to capacity utilization rate. Finally, in summing up the conclusions of the full text of the study, the paper propose some policies and recommendations, such as improving the official promotion and investment system, adjustment of the industrial structure, optimizing the market mechanism, transferring actively industry, and expanding foreign demand from the perspective of the reform of the domestic market, institutional mechanisms to perfect and foreign market development. |
