Wednesday, November 23, 2016
Reactions on reducing overcapacity should be addressed
ANBOUND
In the effort of supply side structural reform, the main works are addressing overcapacity, reducing inventory, deleveraging, lowering costs, and bolstering areas of weakness; the foremost among these is addressing overcapacity. However, addressing overcapacity are now facing real challenges and in its focus areas there are some conflicts and even counteractions, while some have voiced out doubts on the fairness of the areas involved. In our view, the current efforts of addressing overcapacity need to deal with some of the contradictions. First, the contradictions of focus areas and non-focus areas in addressing overcapacity, as well as the differences between difference areas are allowable, but incidents like other provinces buying old equipment in Hebei are not permissible; there cannot be reducing overcapacity and expanding capacity at the same time as well. Second, environmental protection law enforcement should not only be tougher, but also need to be more widely implemented. Third, in the compensation of addressing overcapacity, both state-owned and private enterprises should be treated equally.