Home >> Working Paper
How Serious Overcapacity is in China?——Comparative Analysis and Stylized Facts
Read        DownLoad
TitleHow Serious Overcapacity is in China?——Comparative Analysis and Stylized Facts  
AuthorZhang Shaohua and Jiang Weijie  
OrganizationZhejiang Sci-Tech University;Zhejiang Ecological Civilization Research Center; Jinhe Center for Economic Research, Xi'an Jiaotong University; 
Key WordsExcess Capacity; Capacity Utilization; Dynamic SBM; Inventory 
AbstractThe enterprise's production process is a multi-stage inputs and outputs and dynamic decision-making process, the traditional efficiency evaluation methods applied only to the initial input and output to calculate efficiency, and ignore the production process during the business activities, which may be errors in the estimation of the degree of excess capacity in China. For this purpose, this paper extends the DSBM model proposed by Tone and Tsutsui (2010), and uses the redundant DSBM model to re-measure the industrial capacity utilization of China's provincial industry. The research shows: (1) there is a significant difference between the traditional DEA method and the dynamic DEA method to measure the capacity utilization. The static method tends to underestimate the capacity utilization, overestimate the excess capacity and the excess volatility of the capacity utilization. Based on the dynamic method, the results show that the average capacity utilization is 60.68%, there is a serious problem of excess capacity, and has the obvious characteristics of pro-cyclicality. (2) based on the dynamic analysis of property rights, industry and scale, the problem of excess capacity exists at all levels. The capacity utilization of state owned enterprises is higher than that of other enterprises, the utilization of heavy industry capacity is lower than light industrial capacity utilization, and the utilization of large scale enterprises is lower than that of small and medium scale enterprises. (3) the eastern region does not exist the problem of excess production capacity, while there are serious overcapacity problem in the central and western and northeast region. This phenomenon exists in different property, industry and scale, which shows the market level, the degree of openness and efforts to protect property rights and other factors rooted in different areas is the ultimate cause of regional difference of overcapacity. 
Serial NumberWP1145 
  • Institute of Economics, Chinese Academy of Social Sciences
  • Copyright Economic Research Journal
  • The uploaded articles by this website express the authors’ views, not necessarily the views of this website.
  • Perennial Legal Counsel: Lu Kang (Chong Guang Law Office)
  • ISSN 0577-9154 CN 11-1081/F Postal Distribution Code 2-25l (Domestic) M16 (Overseas)
  • ICP 10211437 (Beijng)
  • No.2,Yuetan Bei Xiaojie, Xicheng District, Beijing 100836, P. R. China
  • Phone/Fax: (+8610) 68034153