Research Of The Problem Of China’s Steel Production Overcapacity And Countermeasures From The Perspective Of Supply Side

Since the 1990 s,our country’s economy has entered a stage of rapid growth,stimulating the steel industry scale expansion,which leads to the problem of overcapacity.Since our economy has gradually become into the "new normal",and investment,consumption and export has been unable to continue to stimulate economic growth,which makes the problem of our steel production overcapacity more prominent.In order to cope with this problem,General secretary Xi Jinping proposed a supply side structural reform in the central financial work leading group of the eleventh meeting on November 10 th,2015,its purpose is to correct factor market distortions,improve the effective supply of the market,this is also the solution for China’s current steel overcapacity provides a new idea.This paper is about the problem of steel overcapacity in China.Unlike the existing research,starting from the factor market and technological innovation,this paper analyzes the present situation,connotation and causes of excess steel production capacity and put forward the corresponding countermeasures based on the structural reform of the supply-side.The present status is continuous growth in production,slow in demand and continuous fall of prices.First of all,China’s steel production capacity is characterized by low capacity utilization,low concentration of industry,weak technological innovation capacity and excess raw materials,reflecting the serious structural surplus of China’s steel.Then,analysis on the causes of overcapacity of steel in supply-side view.On the one hand,the distortion of labor,capital and other elements of the market caused the over-entry,repeated investment and exit barriers of the iron and steel enterprises,resulting in a serious problem of excess capacity.On the other hand,lack of technological innovation led to the proliferation of low-end products and high-end product shortages,resulting in China’s structural excess capacity of steel.What’s more,the fixed-effects model analysis method of panel data is used to verify the correlation between the lack of technological innovation and excess steel capacity in China.The factor distortion is negatively correlated with the steel excess capacity,and the technological innovation is positively correlated with the steel excess capacity.At last,this paper summarizes the main measures of the "de-capacity" of the supplyside steel recently and the effect of the implementation,analyzes the shortcomings and provides a realistic basis for the de-capacity of the supply-side steel,which put forward countermeasures to resolve China’s steel overcapacity respectively from the iron and steel market factors,technological innovation and the government.