Research On The Forming Mechanism Of Excess Capacity In The Steel Industry From The Perspective Of The Evolutionary Game Theory

The problem of excess capacity has been the concern of China’seconomic sector all the time, with the spread of2008full-blown global financialcrisis, China’s over-capacity brought to the peak once again. Since2002, theproblems of blind investment and low-level repeated construction, studying theproblem of excess production capacity has continued without interruption bythe domestic scholars, China’s economic scholars make great achievement,but relatively speaking, these results about the phenomenon of presentlyexcess capacity is still relatively fragmented and inadequate analysis of thelack of theoretical support. In the paper, from the context of the financial crisis,studying the formation mechanism of the China’s steel industry over-capacityby the perspective of evolutionary game, exploring the fundamental causesand developing the rational management policies, to safeguard the health ofthe steel industry and stabileze the growth of macroeconomic.In the article, firstly, sorted out the theory of excess capacity in abroadedaera and the results about the causes of over-capacity in the domesticscholars’ research, found that their study only on the phenomena, notheoretical support. Secondly, described China’s steel industry over-capacitysystematically and summed up the regularity of the steel industry over-capacity.Again, from the perspective of evolutionary game, specificly analyze theevolution Game of China’s steel enterprises, steel enterprises and othermarket participants. Finally, concluding the full paper, remarks on China’s steelindustry over-capacity and put forward policy proposals to solution. In theanalysis of evolutionary game of steel enterprises, distinctive the same sizeand the different sizes of steel enterprises, focuse on the three Class ofevolutionary game about the large steel enterprise–large steel enterprise, thesmall and medium sized steel enterprise–the small and medium sized steelenterprise, the large steel enterprise–the small and medium sized steelenterprise. In the analysis of evolutionary game between steel enterprise andother participants in the market, focuse on the evolutionary game of the steel enterprise and local government, steel enterprise and financial institution, steelenterprise and the demand side. From the evolutionary game perspective tostudy the formation mechanism of excess production capacity, not only hasgood prospects for theoretical development, and the advantages of testing andintuition, and also has a certain significance to solve the problem of excessproduction capacity in the current policy-making.The main conclusions of this paper are:(1) Whether the evolutionary gamebetween steel enterprises, or between steel enterprise and other participants,the final balance of the system’s evolutionary game, the results not only yieldthe parameters of the parties, but also with the system in which the initialstates.(2) The evolutionary stable equilibrium between steel enterprises in theevolutionary game, related the economies of scale steel companies and thesize of the market risk that the steel companies face.(3) From the process ofthe evolutionary game between steel enterprise and other participants, cansee that the state of the steel industry’s over-capacity due to the formation ofthe undesirable stable equilibrium after game party policy of continuousevolution of the dynamic adjustment of the evolution in the long-term game.Local government plays a decisive role in the formation of the ultimate balanceof the evolutionary game by means of the intervention in the steel market; tosome extent, the improvement of the level of demand-side and the irrationalstructure between product supply and demand, exacerbated the over-capacityin the steel industry.