Report: State-owned assets can increase the capacity utilization rate of enterprises by 10 percentage points

Report: State-owned capital withdrawal can increase the capacity utilization rate of enterprises by 10 percentage points

“Three to one, one drop and one make up” (going capacity, destocking, deleveraging, cost reduction, shorting the board) is the primary task of going to low-margin, high-pollution excess capacity, but who is going to produce capacity?

On March 29, at the quarterly analysis meeting of the macroeconomic situation held by the Institute of Finance and Economics of the Chinese Academy of Social Sciences, some experts said that in this round of de-capacity process, private investment can be described as "two-days" compared with government investment. ". State-owned enterprises benefit the most. Large state-owned enterprises have survived in de-capacity and become the role of “the left is king”. They not only have stronger bargaining power in raw material price increases, but they are also preferred beneficiaries in government-led infrastructure projects.

But is the state-owned enterprise possessing "quality production capacity"? The latest research by the National Development and Strategy Institute of Renmin University of China (hereinafter referred to as the “National People's Congress”) found that the capacity utilization rate of state-owned enterprises is lower than that of non-state-owned enterprises, which is 20%-40% lower.

“Overall, the weighted capacity utilization rate of state-owned enterprises is only about 70% of non-state-owned enterprises. We find that state-owned enterprise reform (state-owned capital withdrawal) can increase the capacity utilization rate of enterprises. After controlling other factors affecting the capacity utilization rate of enterprises, state-owned capital withdraws. After that, the capacity utilization rate of enterprises increased by an average of 10 percentage points," said Yin Heng, a professor at the National People's Congress.

Low capacity utilization (overcapacity) is a problem that often needs to be addressed in China's economic operations. Yin Heng said that since the beginning of this century, China has experienced four large-scale overcapacity. The number of overcapacity industries mentioned in the government's energy conservation and emission reduction targets has increased year by year, from 11 backward production capacity during the 11th Five-Year Plan period. The industry has increased to 19 during the 13th Five-Year Plan period.

State-owned enterprises always tend to accumulate excess capacity. Photography / Zhang Wei

In some industries, the elimination of outdated production capacity is slower than the rate of new production capacity, and the problem of overcapacity is becoming increasingly acute. For example, according to the statistics of the China Iron and Steel Association, the national newly-produced steelmaking capacity in 2011-2012 is about 125 million tons. In the same period, the steelmaking capacity was eliminated by about 37 million tons, and the newly added capacity was nearly 90 million tons. Overcapacity wastes scarce resources, reduces resource allocation efficiency, and also hinders industrial structure upgrading.

The study found that the overcapacity problem of state-owned enterprises may be more serious. The fundamental reason is that the government controls the appointment, dismissal and assessment of state-owned enterprise executives, and tends to raise multiple levels of employment, stabilize the social environment, increase fiscal revenue, and maintain high GDP growth. Internalized in the production and operation of state-owned enterprises.

Yin Heng said that state-owned enterprises have multiple goals, not just the least cost and maximum profit. Correspondingly, state-owned enterprises receive more attention from the government, such as low-cost land, tax breaks, easier access to financial resources, lower capital costs, and so on. This has caused a certain degree of soft-constrained problems of state-owned enterprises. On the one hand, the low cost of production factors distorts the investment behavior of state-owned enterprises, leading to excessive investment and redundant construction. On the other hand, the government's “father-loving” makes state-owned enterprises unable to follow the market. The mechanism is superior to the fittest, and backward production capacity is difficult to be eliminated in time. Therefore, state-owned enterprises always tend to accumulate excess capacity.

The National People's Congress of China National People's Congress used the data of Chinese industrial enterprises from 1998 to 2013 to compare the capacity utilization rates of 139 three-digit industrial enterprises with Chinese enterprises and non-state-owned enterprises, and analyzed the impact of state-owned enterprise reform on capacity utilization. It was found that the capacity utilization rate of state-owned enterprises in all industries was significantly lower.

In addition to the nine industries in which textile fabrics are manufactured, the gaps in capacity utilization between state-owned and non-state-owned enterprises in the remaining 130 industries are significant. The weighted capacity utilization rate is calculated year by year, and the results of all 139 industries are completely consistent. In general, the capacity utilization rate of state-owned enterprises in state-owned enterprises is only about 70% of non-state-owned enterprises, and some industries and years have lower values, such as The weighted capacity utilization rate of state-owned enterprises in the glass and glass products industry is basically only half of that of non-state-owned enterprises. From the time point of view, the gap in the overall capacity utilization of state-owned enterprises during 1998-2013 has been narrowing.

At the turn of the century, China experienced a round of state-owned enterprise reforms with the goal of “grasping the big and letting go of small”, and state-owned capital was evacuated in large numbers in almost all industries.

“Our sample covers this special period. This provides a good opportunity for us to summarize the impact of SOE reform on the capacity utilization of enterprises.” Yin Heng introduced this method using the commonly used policy evaluation method (DID method). The effect of a reform on the capacity utilization rate of enterprises. It can be seen that the reform of state-owned enterprises can effectively improve the capacity utilization rate of enterprises. In general, after controlling other factors affecting the capacity utilization rate of enterprises, the withdrawal of state-owned capital will increase the capacity utilization rate of enterprises by 10 percentage points.

How to completely solve the problem of overcapacity in state-owned enterprises, Yin Heng believes that for commercial or competitive state-owned enterprises, they should return to their profit maximization goals, harden their budget constraints, and make state-owned enterprises become the same market competition entities as other enterprises. . The goal of the state as a shareholder and other shareholders is exactly the same, that is, the preservation and appreciation of state-owned capital. The government should not impose other social goals on such state-owned enterprises, nor should it give preferential or care to its elements and policies.

For state-owned enterprises with public welfare, the government should clarify its social responsibilities and give them corresponding resources. The government should impose strict supervision on it to ensure that its public resources are strictly responsible for its public responsibilities.

Enter [Sina Finance and Economics Unit] Discussion