How to Weed Out Zombie Companies?

   For magnesium oxide industry, the most important task is structural adjustment. The over capacity of this industry is structure surplus. It can effectively solve overcapacity through weeding out backward equipment and zombie companies. At the same time, in order to improve supply capacity of high quality magnesium oxide and be better meet market requirement, it also should promote optimization restructure and industrial chain extension.

   At present, there is a number of zombie magnesium oxide manufacturers in this magnesium oxide. They have been listed in outdated capacity enterprise directory. However, because of the local protectionism, these zombie magnesium oxide manufacturers just operate in better market conditions. Because their backward technological level, low level of Safety and environmental protection technology and low automation. This kind of enterprises hit the weak market and are further intensified excess supply. Therefore, if the magnesium oxide industry want to cut the over capacity, it should turn out the zombie companies which is wasting resources, polluting the environment and disrupting the market.

   In order to weed out the zombie companies, it should work on three points:

   One, the nation and environment should establish an incentive mechanism as soon as possible through using industry and financial policy. What’s more, it should promote the quit of backward capacity according to the law and through the strict standard of safety, environmental protection, quality and energy consumption. Introducing enterprises exit the capacity actively through merging and reorganization, transformation, removal and reconstruct or other ways. In addition, it should set bonus and fund that can encourage magnesium oxide suppliers to cut capacity.

   Two, it should take full advantage of financial policy. For the zombie companies with long-run loss and substandard production, in order to pave the way to overcapacity, it should steadfastly compress underlying loan.

   Three, the magnesium oxide industry should pay more attention to lengthen manufacturing chain and promote creative ability development. In order to realize industrialization, automation and fining, it also should focus on break through key technology.

   In addition, in order to renovate conventional industries and weed out backward technology, the whole industry should carry out the technology innovation on energy conservation and emission reduction, environmental protection security, comprehensive utilization, circular economy and other items.

   We believe that tomorrow will be better after weeding out zombie companies.