Deleveraging and structural differentiation of industrial enterprises

XU Qiyuan1

(1.Institute of World Economics and Politics, Chinese Academy of Social Sciences)

【Abstract】With the cyclical weakening of the Chinese economy, many scholars have questioned the data of industrial enterprises profits: constantly we read news about enterprises running into trouble in 2018, while the corporate profits data is relatively stable. Is it incompatible? If the answer is structural differentiation among industrial enterprises, then how seriously is such differentiation? Taking into consideration China’s deleveraging initiative, this article points out the remarkable divergence between SOEs and private enterprises, which is mainly due to financing cost variance. The structural divergence can also be reflected by industrial enterprises in different scales and sub-industries. Consequently, this may deteriorate investment demand and affect industrial upgrading. We should seriously reconsider the policy framework beyond the coordination between monetary and fiscal policy and go back to the essential of supply-side reforms.

【Keywords】 industrial enterprises; above designated size; state-owned enterprises; private enterprises; structural differentiation;

【DOI】

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    Footnote

    [1]. [1] People’s Daily (人民日报), (1) (2018-12-22). [^Back]

    [2]. [2] Lin, H. Economic Daily (经济日报), (3) (2018-7-2). [^Back]

    [3]. [3] http://www.ftchinese.com/story/001079594?dailypop&archive[2019-03-03]. [^Back]

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    [5]. [5] http://www.stats.gov.cn/tjsj/sjjd/201806/t20180629_1607024.html[2019-03-03]. [^Back]

    [6]. [6] http://www.stats.gov.cn/ztjc/ztfx/jnggkf30n%20/200811/t20081106_65695.html[2019-03-03] [^Back]

    [7]. [7] Henan Provincial Bureau of Statistics. http://www.ha.stats.gov.cn/hntj/lib/tjnj/2010/html/j14.htm. The original text is that from 1998 to 2005, industrial statistical survey objects are divided by enterprise size instead of by affiliation. In this case, there are all state-owned and non-state-owned industrial enterprises with annual main business income of CNY 5 million or more (referred to as above designated size), non-state-owned industrial enterprises with annual main business income of CNY 5 million or less (referred to as below designated size), and individual industries. [^Back]

    [8]. [8] Beijing Municipal Bureau of Statistics. http://www.bjstats.gov.cn/nj/main/2013_ch/content/sm11.htm. The original text is that from 2000 to 2006, the scope of industrial surveys was divided by the size of enterprises instead of by affiliation. In this case, there are all state-owned and non-state-owned industrial enterprises with annual main business income of CNY 5 million or more (referred to as above designated size), and non-state-owned industrial enterprises and all self-employed industrial units with annual main business income of CNY 5 million or less (referred to as above designated size). [^Back]

    [9]. [9] Wang, D. http://www.npc.gov.cn/npc/xinwen/2018-06/20/content_2056324.htm [^Back]

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    [15]. [15] Xu, L. http://opinion.caixin.com/2018-09-30/101331679.html [^Back]

    [16]. [16] Data source: CIB research, Wind database, and author’s calculation. [^Back]

This Article

ISSN:1007-0974

CN: 11-3799/F

Vol , No. 02, Pages 112-122+7

March 2019

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Article Outline

Abstract

  • 1 Profit data of industrial enterprises faces two contradictions under economic downward pressure
  • 2 Does the profit growth rate of industrial enterprises reflect the reality?
  • 3 The differentiation of state-owned enterprises and private enterprises behind the steady profit growth of industrial enterprises above designated size and its reasons
  • 4 Concerns brought about by the differentiation of state-owned enterprises and private enterprises in the industrial sector
  • 5 Conclusion and prospects: responding to differentiation of industrial enterprises with structural policies
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