英媒：中国补贴模式面临生产过剩危机

choi

BBC Chinese, June 17, 2013
http://www.bbc.co.uk/zhongwen/si ... _overcapacity.shtml

, which is based on


Jamil Anderlini, Ambitions in excess; Overcapacity fuelled by subsidies threatens the world’s second-biggest economy. Financial Times, June 17, 2013 (heading: Chinese industry).
http://bambooinnovator.com/2013/ ... nd-biggest-economy/
(overcapacity, through local subsidies, in chemicals, cement, earthmovers, flatscreen television, aluminum, automakers)

Quote:

(a) “But in almost every sector where China’s low-cost goods have come to dominate, something strange has happened. Once the bulk of global manufacturing in a given industry has moved to China, overcapacity quickly follows and these sectors begin to cannibalise themselves. Suntech was a prime example.

(b) “An older example is the mobile handset market, which the Chinese government set out to dominate a decade ago with national champions sporting names such as Panda, Konka and Ningbo Bird.

“Even in China not one of these companies is a household name today. But many analysts had once predicted these low-cost producers would rise to become the Chinese equivalents of Nokia, Ericsson and Motorola.

“The Chinese government, particularly local authorities, poured vast subsidies into these companies in the hope of turning them into global forces but they all eventually lost the race to develop new technology.

“‘There was a lot of talk back then about how these companies would become great new Chinese technology giants and they certainly threatened their international competitors by eating away at the low end of the value chain,’ says Anne Stevenson-Yang, research director at J Capital Research. ‘But over time Chinese companies tend to remain factories that manufacture huge amounts of low-end, undifferentiated stuff.’

“Several studies have found that the ability of Chinese industry to dominate global manufacturing in certain sectors is largely due to subsidies, most of which are provided by local and provincial governments.

(c) “Some of the most heavily subsidised companies in China are automakers, such as Chery, BYD and Geely. Some analysts predict they will ultimately meet the same fate as the handset makers.

“Overcapacity in the auto industry is rampant and in the case of Geely, which bought Volvo in 2010, more than half of its net profits came directly from subsidies in 2011. In fact, subsidy income for Geely that year was more than 15 times greater than the next biggest source of net profits – 'sales of scrap metal' – according to analysis from Fathom China.


My comment:
(a) There is no need to read the rest of FT report.
(b) “In a recent study, Usha and George Haley, US-based academics, studied how Chinese steel, glass, paper and auto parts producers turned from bit players and net importers to the world’s largest manufacturers and exporters in just a couple of years.”

Usha Haley
http://en.wikipedia.org/wiki/Usha_Haley
(Born in Mumbai, India, she received a Bachelor's degree in Politics at Elphinstone College, Mumbai and then went on to get graduate degrees from various American universities including a Master's from University of Illinois at Urbana-Champaign in Political Science, and New York University, where she received Master's and PhD degrees in International Business and Strategy)
(i) Her official website (with a photo) can be found in section 7 External links.
(ii) Usha and George Haley are wife and husband.
(iii) Their latest book:

Usha CV Haley and George T Haley, Subsidies to Chinese Industry; State capitalism, business strategy, and trade policy. Oxford University Press, Apr 15, 2013.
http://global.oup.com/academic/p ... 9?cc=us&lang=en