Overcapacity is a haze that looms over the Chinese market. It is also a shackle that restricts the healthy growth of many companies, and it is also a bottleneck that restricts China's industrial development.

Judging from the history of industrial development experienced by Western developed capitalist countries, developing economies usually experience a period of rapid industrialization. At present, mainland China follows the economic development model of Japan, South Korea, and Taiwan in the late 20th century. Due to the rapid expansion of the city, the booming real estate industry has rapidly stimulated the market demand of various industries, especially the construction and decoration materials industry in China, which has ushered in an unprecedented large-scale development. However, due to the massive follow-up of private capital and the excessive investment of banks, the real estate industry in China has experienced explosive growth, resulting in a sharp increase and disorderly expansion of various building materials manufacturing and processing companies, and this has caused a large excess of production capacity in the market.

In response to the overcapacity in various industries in China, the National Development and Reform Commission has successively issued a series of restrictions on steel, aluminum, cement, chemical, oil refining, and wind power equipment. A survey released by the European Union Chamber of Commerce in China at the end of November 2009 showed that the scale of overcapacity in China has been very large, and the factory utilization rate in most industrial industries is only 35-45%. Of course, as a supporting industry with the real estate industry, the overcapacity of the lighting and ceramic industries is no exception.

According to industry experts from the European Union Chamber of Commerce in China, the main reasons leading to overcapacity in China are the following: First, China's high savings rate, especially the high savings rate caused by the unallocated retained earnings of state-owned enterprises; second, the sharp decline in export demand. Mainly stems from the needs of the U.S. market; Third, domestic consumption is sluggish; Fourth, weak enforcement of laws and regulations; Fifth, raw materials prices caused by government policies are low; Six, China's capital costs are too low; Seventh, national financial system leads to local The government excessively attracts foreign investment; 8 is local protectionism; 9 is the low technical threshold of the industry; 10 is localism leads to separatism; 11 is that environmental protection, health and safety standards and regulations have not been fully implemented; 12 is market share The game with profits is too fierce.

One person runs faster and faster than the other; the direction of the company's development is clear, and you are ultimately guided by market demand. The overcapacity in the market is a kind of survival for any company. For example, as product profits become lower and lower, return on investment is long, there is a large amount of delta debt, stocks are overstocked, and the cost of innovation is high. These unfavorable factors will exert considerable constraints on the development of each company. What is awful is that the majority of corporate executives are very clear that the industry already has excess capacity, and the company's operating risks will increase. However, everyone will often overlook this issue inadvertently.

People do not always see the coffin and do not cry, let alone the Chinese people have the "man-made financial death, the birds for food and death" of the Millennium Business Road. In order to survive and develop, almost every company has established its own market share growth plan. Most business owners hold a kind of "people in the rivers and lakes, involuntarily" mentality; some business owners do not understand the market situation. As a result, many companies that lack market competitiveness are quickly eliminated. According to the survey statistics of the newspaper, only one ancient town in Zhongshan, in the past five years, an average of more than 1,500 lighting companies closed down every year. The cost of such repeated investment, repeated construction, repeated production, and repeated waste is undoubtedly a disaster for a country.

In the era of overcapacity, the king of SMEs is market integration. Expanding the brand, consolidating its own channels, striving to cultivate a team of core talents of its own, constantly innovating product technology, making great efforts to establish and improve the service system of the company, and minimizing the investment in fixed assets of the company, whether it can invest or not. The money is definitely not cast. Must learn to integrate resources, hold groups to keep warm, to use other people's capital as much as possible to grow their own corporate strength, and further enhance their own ability to resist risks, so that their own companies will always be invincible.

There are no companies that do not fall, and only those that do not fall. In today's increasingly fierce market competition, the majority of business operators must not guard the old Huang Li calendar. They must learn to focus on the overall situation, focus on the future, and advance with the times. Otherwise, the ruthless market will bury your ideals and future.