Recently, I talked with some peers in the research cyclical industry. They said that the period from June to July was considered to be a low period. It is expected that in the second half of the year, cyclical industries such as commercial vehicles and Construction Machinery will gradually become Get out of the trough. The results now appear to have not stabilized as expected in August and September, and cyclical product data continues to decline. Businesses are burdened with heavy fixed costs and their profitability has dropped significantly.

In fact, since the second half of last year, expectations for a cyclical industry rebound have been delayed. From the decline in the sales of construction machinery, heavy trucks, and heavy machinery in cyclical industries in the second quarter of last year, both the industrial and securities sectors have been waiting for the government to introduce new stimulus policies, starting with the forecast that they will come out of the trough by the end of 2011. , But in fact did not meet expectations, and then push forward the expected quarterly recovery of the recovery quarter by quarter, the result is increasingly pessimistic. In 2012, the sales of heavy-duty buses continued to fall, data on excavators, cranes, and loaders got worse and worse. Machine tool industry orders fell sharply. Even the first decline in energy demand occurred, and the increase in investment in coal fixed assets slowed down. In 2012, the hope that enterprises are expected to recover in the second half of the year will again be shattered. Companies feel that the demand for equipment on various economic chains is shrinking, and the economy has actually entered a downward path.

Looking around the surrounding industries, there is excess capacity in ships, excess capacity in photovoltaics, overcapacity in wind power, excess capacity in cement, overcapacity in steel, overcapacity in heavy machinery, and overcapacity in excavators...

If you question the investment of companies for these problems, you may get the answer: Under the market economy system, overcapacity is the norm. However, a more rational view is that the short duration of industrialization in China has resulted in the waste of production capacity. Even if the economy recovers, it will take a long time to digest the rapid social productivity that has been formed over the past decade. People are gradually returning to reality. An entrepreneur who is seeking an industrial upgrade says: "Low-level repeated investment is simply a crime. The waste of resources caused by excessive investment may be the biggest waste in China at present." These excess capacity may bring China into the “rust era”.

In the 1970s, some developed countries experienced the decline of old industrial bases after experiencing booms in heavy industrialization, a large number of factories closed down, idle factories and abandoned rusty equipment, so these old industrial bases For example, the Ural Mountains in Russia and Ohio in the United States are collectively referred to as the "rust zone." Since 1999, China has entered the era of heavy industrialization. Steel, cement, glass, raw coal and other industries have experienced rapid growth. The production capacity of the heavy industry has increased dramatically. During the ten years from 1999 to 2008, the compound annual growth rate of steel production exceeded 20%. The large demand for steel comes from Crazy investment in fixed assets and rapid expansion of production capacity in heavy industry companies. On this basis, the four trillion yuan that China saved the market in 2009 was like a stimulant injected into the cyclical manufacturing industry that was still in excitement. From 2009 to 2011, the investment in fixed assets in the manufacturing sector increased by 26.8% and 27% respectively. 31.8%, and directly led to the overcapacity of the entire society.

The expansion of production capacity is usually determined by the relationship between supply and demand. The rapid growth of China's heavy industrialization objectively conveys the market with information that exceeds supply. The investment in the industrial chain of industrial enterprises has a multiplier effect. The excessively rapid growth rate will inevitably lead to an exponential growth in the equipment manufacturing industry. .

In 2005, there were 19 hot-rolled production lines in China, but by 2008, the hot-rolled production line had reached 61 lines, and 42 lines were added in three years.

In September 2007, the National Development and Reform Commission issued the "Mid-term and long-term development plan for renewable energy" and proposed that by 2020, the total installed capacity of wind power in China is 30 million kilowatts. In fact, China is in the value chain of new energy sources such as wind power and solar energy. At the lowest end, there is basically no technical threshold, and the scale expansion is simple and easy to copy.

By the end of 2008, there were 11638 wind turbines installed in China, with a total installed capacity of 12.17 million kilowatts. As a result, the competent authority revised the data and increased the installed capacity of the power supply in 2020 to 100 million kilowatts. In 2009, 4 trillion wind power investment became a major attraction, and wind power investment has been formed overnight, repeatedly introduced and duplicated in many places. Industrial development has gradually grown from excessive to overheated. At present, there are more than 80 wind power mills across the country, and there are also 50 blade plants and more than 100 tower manufacturing plants. If calculated by the power generation capacity of each 500,000 kilowatts, the scale of power generation will reach 40 million kilowatts, and the actual national market capacity will be less than a quarter.

Goldwind Technologies, which was listed at the end of 2007, was hot at the time. The company's gross profit margin has dropped from 29.8% in 2007 to 13.81% in the first half of this year. Before 2010, the company can still use premium to maintain profit growth, entering 2011. Both the company’s revenue and profits have declined.

The global photovoltaic capacity demand is about 30 GW, and the production capacity is more than 40 GW. 80% of the demand for this industry is in foreign countries and 80% of production capacity is in China. The fall in polysilicon prices will almost bring losses to the entire industry.

Another highlight of the RMB 4 trillion investment is the concentrated investment of the high-speed rail. Under the prevailing economic environment, the railway investment plan also advanced the original 2020 investment plan to 2012. As a result, construction started everywhere and equipment was everywhere. The next issue is more frequent outbreaks of security incidents and the sheer number of equipment idles caused by downtime inspections.

On the other hand, the interest orientation outside the supply and demand relationship has also led to a large amount of capacity expansion. The rapid increase in the value of assets such as real estate also makes the seizure of resources an investment motive other than corporate operating profits. In recent years, including state-owned enterprises and some well-known private enterprises, the pursuit of investment and scale is no less than the pursuit of profits. The investment process itself has become an act of promoting social status and asset arbitrage.

The thrust from the central level is the pursuit of the scale of the enterprise. In the “Eleventh Five-Year Plan”, the SASAC plans to reduce the number of central enterprises from 196 to less than 100. This process has objectively led to the expansion of the scale of the central enterprises that remain in between. Its dominant position in the reorganization. During this period, the integration of steel, cement, and coal in order to control redundant construction also forced more companies to expand their scale in order to retain their status, and some small-scale production was later expanded into large-scale production, greatly boosting the equipment manufacturing industry. Demand. In general, the investment-led economy, “control scale”, and “adjustment structure” during the “Eleventh Five-Year Plan” period have made the size of the manufacturing industry nearly double or even increase several times.

For example, the wind power investment government has subsidy, it uses bank loans to make investment to withdraw subsidies, and even subsidy in some areas exceeds the investment itself; the capital market is also a good platform for arbitrage; once a listed company has a link with “emerging industries” Projects may obtain financing opportunities, and for companies with a certain size, their financing in the capital market may exceed the profits of the company for 10 years, and financial sales will bring the listed companies to “acceptable accounts receivable”. The third arbitrage opportunity is to use investment to seize resources. These large companies, especially labor-intensive industries, are very popular among local governments. They are in order to obtain paper profits and to obtain capital market financing. Investment promotion will give some big companies very favorable conditions. They will use coal resources or free land to attract large enterprises to settle in local industrial parks. We can observe that many companies have strong investment impulses, and do not pursue return on investment, nor do they have much scientific argumentation. Their goal is to promote corporate status instead of pursuing return on investment.

As early as in 2005, Zhu Yanjing, a ship research expert of the China Shipbuilding Industry Economic Research Center, and Ms. Tan Naifen, a member of the China National Shipbuilding Industry Association, have noticed that the rapid growth of the shipbuilding industry may bring about excessive investment. They call for rational investment in the industry to avoid the appearance of “sun. "Ship" risk. In the second half of 2006, the author went to visit Mr. Jin Zhuanglong, who was then deputy director of ship defense of the National Defense Division. He expected that there might be an excess of investment in the shipbuilding industry. He said that he would discuss and plan to raise industry investment standards to avoid excessive investment in the industry. The waste caused. Unfortunately, in March 2008, the Commission of Science, Technology, Industry and Technology for National Defense was revoked. Mr. Jin was transferred to a large aircraft company as general manager. The improvement of the standard from the leading enterprises in the industry was not realized. The next step was the crazy investment in the Chinese shipbuilding industry. .

According to incomplete statistics, by the end of 2011, the global shipbuilding capacity exceeded 200 million dwt, of which 80 million to 10 million dwt were in China, and most of these new capabilities were built after 2005, that is, These production capacities will not simply exit the market in a short period of time. Overcapacity will exist for a long period of time. Oversupply means that the ship price is in a long-term downturn, and the profitability of shipbuilding companies is difficult to recover.

In 2010, the cement reserve in China reached 19%, but 170 production lines were still put into operation in 2011. In 2012, there were 216 production lines under construction. It is expected to be completed and put into operation in 2013. By 2013, China's new dry process cement will reach 3.133 billion tons, and the demand is expected to be 2.4 billion tons, and the surplus will exceed 30%. Even if the backward production capacity is completely withdrawn, the cement production capacity will still be in serious excess.

Obviously, overcapacity is not a short-term stimulus plan that can be solved. In 2010, China benefited from a strong rebound in demand for 4 trillion investment raw materials, but by July of that year, China’s steel production capacity reached 730 million tons, while the demand was only 470 million tons. 250 million tons. In 2011, China excavators sold 180,000 units, while the capacity of the same period has exceeded 300,000 units, and almost half of this capacity will be built after 2008.

This is almost a vicious circle. With the fierce competition, the scale expansion of China's manufacturing industry is very alarming. This high-speed expansion has not only resulted in a large amount of waste in repeated construction, but has also rapidly pushed up the cost of social factors and greatly increased the operating costs of enterprises. The break-even point of manufacturing companies has risen steadily, and the break-even point of excavator companies has been two years ago. The number of 1,000 units is more than 3,000 now; the break-even point of forklifts has risen by 10,000 units. Historically, Anhui Heli has grown from small to large with almost no loss record.

Since the beginning of this year, local governments are just around the corner trying to replicate the local version of “four trillion yuan”. However, the mode of low-level redundant construction in China’s manufacturing industry needs to be reconstructed and reflect on itself. The economic downturn is precisely the opportunity for enterprises to optimize the connotation and industrial upgrading, and try to avoid further production capacity. The waste of resources brought about by the expansion and the "rust era" may occur.