The problem of overcapacity has been plaguing China's industrial economy, but it has never attracted so much attention as it does now. Sources said that several ministries and commissions will improve the "combination of policies" related to the elimination of excess capacity in the near stage, such as strengthening the management of bank loan review, the implementation of differential electricity prices, total energy consumption limits, etc.
In fact, since the beginning of 2013, the energy sector has been undergoing various reforms, including canceling key coal contracts, improving the pricing mechanism for refined oil products, and reforming the pricing mechanism for natural gas. On July 9, an industry expert said that the series of reform measures will actually affect the energy-intensive industries, in order to eliminate excess capacity.
Energy reform has forced the elimination of production capacity
Recently, it is said that the overall plan to resolve the problem of overcapacity jointly studied by the National Development and Reform Commission and the Ministry of Industry and Information Technology will be released this month.
The improvement direction of the "combination policy" of relevant ministries and commissions is closely related to the energy field. On the one hand, it is necessary to continue to deepen the price reform of resource products and straighten out the price relationship of coal, electricity, oil, gas, water and mineral products. On the other hand, it will accelerate the research and establishment of total energy consumption control targets, decomposition and implementation of the local government mechanism.
Since the beginning of this year, energy reform has involved coal, oil and gas. In March, the National Development and Reform Commission shortened the price adjustment cycle in the domestic refined oil pricing mechanism to 10 working days and removed the 4 percent margin limit. In the coal sector, major reforms have been carried out since the beginning of this year, such as cancelling key coal contracts and improving the linkage mechanism between coal and electricity, further promoting the marketization of coal.
For energy policy change how to affect the excess capacity, the National Development and Reform Commission energy research institute of energy system analysis research center researcher jiang said, "energy reform to the capacity selection of the key industries can be said to be from, from the upstream supply of energy intensive industries, can be directly control the construction of a productivity within the industry".
Tighter credit has forced companies to act
If the reform of the energy sector is limited to the role of overcapacity industries, but to strengthen the financial credit management of these enterprises, it is a matter of the fate of enterprises.
It is said that the authorities will implement strict financial policies to curb overcapacity. In the next stage, the CENTRAL bank and the China Banking Regulatory Commission will give more prominence to financial support for energy conservation and emission reduction and the elimination of outdated production capacity. Yin Zhongli, a researcher at the Institute of Finance of the Chinese Academy of Social Sciences, told reporters that "in some industries with overcapacity, bank lending will be controlled."
Level of financial restrictions have been put in place. On July 5, The State Council issued the Guiding Opinions on financial Support for Economic restructuring, Transformation and Upgrading. In the guiding opinions, the financial management of industries with overcapacity is defined in detail and treated differently.
In addition to differentiated treatment of enterprises in the industry, the guideline also explicitly requires that enterprises under the phase out of outdated production capacity be supported to delisting by means of asset preservation, transfer of non-performing loans and write-off of loan losses. It is strictly prohibited to provide any form of additional credit or direct financing for illegal construction projects in industries with serious overcapacity, so as to prevent blind investment from exacerbating overcapacity.
After the release of the "Gold Ten", the role of the financial industry in the elimination of overcapacity industry is increasingly prominent, it is reported that the future of the banking financial institutions will be energy-saving emission reduction and elimination of outdated capacity projects in the credit and financing situation of a comprehensive, in-depth investigation. According to media reports, "The Central Bank and the China Banking Regulatory Commission will strictly examine the financing applications of enterprises with high energy consumption and high emissions. For industries with excess capacity, backward capacity and energy conservation and emission reduction control, the credit authorization shall be properly received, especially for financing involving capacity expansion, the credit authorization shall be sent to the head office."
At the same time, sources said that in the "combination of policies" of multiple ministries and commissions, there will be no additional credit support for illegal projects under construction that do not meet the provisions of the energy conservation and emission reduction policies and explicitly require the elimination of outdated production capacity.
In this regard, some industry insiders pointed out that no matter the relevant ministries issued a "combination of policies", or strengthen the financial credit management of overcapacity industries, this series of reform measures are to achieve the purpose of eliminating excess capacity.