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Make use of technology innovation to reduce overcapacity

Tuesday, Aug 06, 2013

Recently, China's Ministry of Industry and Information Technology announced the list of eliminated laggard capacity enterprises in 19 industry sectors, involving alumina, electrolytic aluminum and other industries. And the Ministry strives for shutting down the laggard capacity on the list before the end of September, and makes sure to completely eliminate before the end of this year.

This is the positive signal which marks the China's government speed up the structure adjustment. The related enterprises should make scientific technology standard, learn the advanced experience from foreign countries, and stimulate the new needs through advanced capacity.

In the market economy, moderate overcapacity facilitates the competitive mechanism to play the role. However, the overcapacity in some industries is beyond the scope of normal market competition. The insufficient effective demand and overcapacity have become the outstanding contradiction which effects the industrial economy.

To reduce the overcapacity, the enterprises should improve technology standard and productivity, reduce the consumption of resource, energy, and raw materials.

To solve the problem of overcapacity, it needs to control the supply, or stimulate the need. Meanwhile, laggard capacity should be transformed into advanced capacity through new technology, and the upgrade of economy structure will be realized.

To transform the pattern of economic development, it needs to make use of high-tech products to replace the original products, and maximize the effect through use the lowest cost. Thus, Industry technology standard and market admittance standard should be based on the scientific technology innovation, and the country should increase the investment to save the energy.

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