At present, the efficiency of China's non-ferrous metal enterprises is on a downward trend, and overcapacity has become increasingly severe. Addressing overcapacity has been identified as a top priority for the country this year, with industries such as electrolytic aluminum seen as key areas that could potentially break out of their current challenges. At the recently held 6th meeting of the 3rd China Nonferrous Metals Industry Association, discussions centered around the nation’s economic growth, industrial restructuring, and the pressing issue of overcapacity.
Tian Yong, General Manager of Yunnan Metallurgical Group, emphasized that resolving overcapacity is essential for improving the international competitiveness of Chinese enterprises. He pointed out that the current situation reflects not just an overproduction problem but also a lack of global influence. In the face of large-scale production capacities in developed countries, which have become a dominant force in the industry, China's own overcapacity has led to intense competition and inefficiencies. "The real issue is our lack of international competitiveness and the voice we hold in the global market," Tian said.
He argued that a country's competitive edge stems from the environment that fosters it, rather than just what companies do or how they operate. According to him, there are many excellent enterprises and managers within China, but the challenge lies in creating a fair and level playing field. Certain monopolistic groups control access to high-quality resources, forcing basic raw material industries to bear financing costs far above international averages. Combined with inefficient energy pricing mechanisms and high logistics costs, this creates a difficult environment for leading Chinese companies to thrive.
Tian stressed that under a market economy system, the government, businesses, and society each have roles to play. The government should focus on building a supportive environment and fostering industry development, while ensuring people benefit from these efforts. "We can't simply use administrative measures to assess whether overcapacity exists or assign qualitative judgments to the industry," he added.
Looking back, Tian first proposed the idea that the development of energy-intensive industries should align with the national energy model in 1998. Last year, he advocated for a more rational regional distribution in the non-ferrous metals sector. Given the unpredictable global economic landscape, he believes that non-ferrous metal companies should leverage their potential to address overcapacity and focus on enhancing their global competitiveness and influence.
To achieve this, Tian suggested prioritizing the rationality of regional distribution, avoiding a one-size-fits-all approach. He also called for the government to introduce an energy price linkage mechanism between energy and energy-carrying industries, especially in resource-rich regions. Additionally, he urged the state to support the application of non-ferrous metals in energy-saving and environmentally friendly products and projects through practical and effective policies in finance, taxation, R&D, and project development.
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