In the historical perspective, the best point in time to addressing overcapacity is in the case of the entire industry downturn, steel prices generally loss to promote, The resistance in this time is minimal. In 2009 around, we had this opportunity, but we did not grasp, instead we took a loose policy so that a large number of excess capacity survived, and even expansion. Today, the difficulty we faced is greatly increased than in 2009.
From the point of view of supply-side structural reform, it is actually very necessary that iron and steel and other excess industry to address capacity. But the more important is the supply of new industries and new capacity. On the one hand, new industries and new production capacity can provide industrial base for local and support local development, which is possible to ensure the interests consistency of local and central, so that policy is resolutely and thoroughly implemented. On the other hand, new industries and new capacity provide new profit opportunities for social capital and reduce the resistance of the market players.
From the point of view of means, the time of market to address capacity is slow, but the effect is lasting and generally not repeated. The effect of using administrative means to address capacity is immediate, but the cost is too high, there is a great possibility of resumption of production. In the mind of authoritative source, the means of addressing capacity includes: firstly, improve the access threshold of environmental protection, quality, safety, etc.; secondly, through the adjustment of credit policy to wean the zombie enterprises. These methods have been widely used in practice this year. Such as the policy adjustment of credit, strictly control the credit input of illegal new production, support corporate debt restructuring and mergers and acquisitions, support banks to speed up the disposal of non-performing assets. In addition, the control of the steel industry land approval and the media exposure of all the wrongdoing support of addressing capacity, etc., are all desirable.
From the next stage of the policy dynamics, the current intensity has been very large, the task of full year addressing capacity has been completed. However, in the case of steel production continues to increase, the steel industry's various policies are expected to continue to tighten, the industrial measures aiming at clearing the capacity and then improving the concentration will be introduced. The final of addressing capacity will limit the road of production, rather than the local reporting of "production capacity."
