Resist the "vicious competition of involution"! Qinghai Building Materials Industry Association issued a proposal

2024-08-16 09:09:17

This lack of demand is the general trend of the economic cycle, which is irreversible in the short term. It is determined by the economic development cycle and is a problem in the process of development and transformation. The disorderly competition among enterprises leads to the meager profits of the whole industry. Therefore, we need to take the initiative to respond, maintain strategic strength, strengthen confidence in development, advocate the concept of fair competition and win-win cooperation, and jointly promote the healthy and orderly development of the industry.

On August 14, the Qinghai Building Materials Industry Association issued a proposal on strengthening industry self-discipline to resist "involution vicious competition", saying that in order to fully implement the spirit of the Third Plenary Session of the 20th Central Committee of the CPC and the meeting of the Political Bureau of the Central Committee on July 30, strengthen industry self-discipline and prevent "involution" vicious competition, the industry should be strengthened. To restore the fragile situation of ecological construction in Qinghai cement industry, promote Qinghai enterprises to regain confidence, overcome challenges and difficulties, and promote the sustainable and healthy development of the industry. In

order to fully implement the spirit of the Third Plenary Session of the 20th Central Committee of the Communist Party of China and the meeting of the Political Bureau of the Central Committee on July 30, and strengthen the self-discipline of the industry, the following proposals are issued to the cement enterprises of the whole province:

To prevent "involution" vicious competition, restore the fragile situation of ecological construction of cement industry in our province, promote enterprises in our province to regain confidence, overcome challenges and difficulties, and promote the sustainable and healthy development of the industry, the following proposals are issued to cement enterprises in our province:

First, correctly understand the situation and jointly promote the development of the industry.

At present, the whole industry presents the operation characteristics of "continuous decline in demand, low price fluctuation, and continuous loss of the industry". The sales of real estate market was weak, the investment showed a trend of contraction, and the growth rate of infrastructure investment continued to slow down, which directly resulted in the decline of cement demand, the deterioration of supply-demand relationship, the unstable mentality of enterprises, especially in the border area of Qinghai and Gansu, the competition for market share, the intensification of vicious competition, and the continuous bottoming of prices, resulting in the price falling below the cost line and the damage to the industry ecology. This lack of demand is the general trend of the economic cycle, which is irreversible in the short term. It is determined by the economic development cycle and is a problem in the process of development and transformation. The disorderly competition among enterprises leads to the meager profits of the whole industry. Therefore, we need to take the initiative to respond, maintain strategic strength, strengthen confidence in development, advocate the concept of fair competition and win-win cooperation, and jointly promote the healthy and orderly development of the industry.

2. Adjust the balance between production and sales.

On April 30, the meeting of the Political Bureau of the Central Committee pointed out that "the sustained economic recovery is still facing many challenges, mainly due to insufficient effective demand, greater pressure on enterprises, more risks in key areas, and the domestic cycle is not smooth enough", and rationally viewed the downward trend of the domestic cycle and the current situation of the reduction of cement industry. It is proposed that cement enterprises in the whole province should organize production according to market demand, actively control the quantity from both ends of production and marketing, reduce the quantity, do not fight price war, do not compete for share, and achieve "quantity reduction without profit reduction" or "quantity reduction with profit increase" by strengthening supply-side control. Pursue quality management and effective development, reduce production and consumption intensity, and reduce ineffective supply.

3. Resolutely implement the policy of peak staggering production. On May 23,

2024, the State Council issued a circular on the Action Plan for Energy Conservation and Carbon Reduction from 2024 to 2025, pointing out that by the end of 2025, the national cement clinker production capacity will be controlled at about 1.8 billion tons, and the regulation and control of the production capacity of the building materials industry will be strengthened. Strictly implement the replacement of cement production capacity, strengthen the output monitoring and early warning of building materials industry, and promote the normalization of cement peak staggering production. Under the current situation, peak staggering production is still the most effective way to promote the structural reform of the supply side and improve the serious contradiction of excess capacity in the industry. The whole industry strictly implements the peak staggering production policy, scientifically formulates the annual peak staggering production plan, and all enterprises consciously and actively implement it, so as to realize the precise, rigid and normalized peak staggering production in the whole province, reduce resource consumption and reduce ineffective supply. Maintain a dynamic balance between supply and demand.

Fourth, give full play to the leading role of "head geese" and realize the flying of "geese".

Implement the spirit of the meeting of the Political Bureau of the Central Committee on July 30, 2024, and appeal to the cement enterprises of the whole province to abandon the traditional concept of "output is benefit, and more production is more profit", and to produce scientifically, orderly and normatively according to the approved production capacity of the competent department of the industry, not to pursue more production and not to overproduce blindly. We should strengthen industry communication and enterprise dialogue, abandon cold war thinking, not vicious competition, not "cheap" products, not "involution" marketing, consciously resist unfair means such as low-price dumping and loss-making sale, jointly create a fair and stable market envi ronment and competition order, and build a good industry ecology. To play a leading role in peak staggering production and market order, small and medium-sized enterprises should actively follow up, consciously implement the requirements of peak staggering production, actively practice self-discipline responsibility, abandon the thinking of "quantity, cost and profit" and firmly adhere to the concept of "price, cost and profit".

Fifth, strengthen exchanges and coordination to achieve mutual benefit and win-win results.

Strengthen information communication and resource sharing with surrounding regions and enterprises in the province, constantly innovate cooperation modes, strengthen mutual trust, deepen cooperation, base on the long-term, face the future, and strive to achieve mutual benefit and win-win situation. Promote the industry to return to a healthy and rational track as soon as possible, and jointly maintain market order and industry ecology.

6. Accelerating transformation and upgrading and promoting new quality development.

In accordance with the requirements of the CPC Central Committee's document "Carbon Reduction, Emission Reduction, Green Expansion and Growth", we should speed up the application of green intelligent technology, enhance the overall strength of environmental protection, energy saving, quality and safety of enterprises, carry out fair competition and eliminate the fittest. Advocate the establishment of measurement standards and multi-dimensional performance evaluation system, such as innovation ability, customer satisfaction, quality improvement, brand influence, employee growth and social contribution, to stimulate the internal motivation of enterprises and enhance the growth potential of enterprises. Enterprises are encouraged to achieve win-win economic and social benefits through technological innovation and management upgrading, and contribute to the sustainable development of the industry.

We firmly believe that under the leadership of the leading enterprises, the cement industry in our province will surely develop in a healthy, stable and high-quality direction by uniting as one, making joint efforts, advancing hand in hand, strengthening self-discipline, resisting involution, and seeking new economic growth points and development paths with an open mind and innovative thinking.

Qinghai Building Materials Industry Association

August 14

, 2024
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