The way of supply side reform

The way of supply side reform

New choices under the new normal


  From the perspective of economics, the familiar "troika" of investment, consumption and export belongs to the three major demands on the demand side, while the corresponding supply side focuses on the supply and effective utilization of production factors. When there is demand, there will be supply. "Supply side" and "demand side" are like two sides of a coin. For a long time, China's macro-control has focused on the "demand side". Now, the central government has made it clear that the focus of regulation and control should be shifted to the supply side, that is, while moderately expanding aggregate demand, efforts should be made to strengthen supply side structural reform.


  The strategic thought of "supply side reform" not only shows the accurate control of the central government over the current macroeconomic situation, but also reflects the objective fact that the prospects of various industries represented by manufacturing industry are not optimistic under the new normal. The downturn, sluggishness and decline are a true portrayal of the development process of China's manufacturing industry in recent years. As a result, countless enterprises have failed. Now, after crossing the development stage of high-speed blowout, China's tricycle enterprises have also come to the crossroads facing choices.


  In 2015, China's tricycle industry was neither slow nor fast in the complex and changeable market. The production and sales of three wheeled motorcycles were 2037800 and 2034900, down 5.73% and 5.52% year-on-year compared with 2161600 and 2153800 in the same period in 2014; The highlight moment of electric tricycle is no longer, and the sales volume has declined slightly, stabilizing at about 8 million, entering a mature and stable period. At the same time, the macro-economy is extremely severe, which seriously affects the people's consumption desire. In the past year, the whole world economy has been in a downturn, and so has China's economy. After the rapid development in previous years, the "investment, export and consumption" drive of China's economic Troika has been difficult to continue. In particular, the rapid rise of labor costs has led to the relocation of a large number of labor-intensive industries and the increasing unemployment trend of ordinary workers, which has directly led to the disappearance of consumer demand in a large area and the reduction of market enthusiasm.


  The severe environmental situation and the reduction of consumption enthusiasm have given many enterprises a headache, but it is more noteworthy that the disadvantages of the enterprise's own development model have begun to appear. In recent years, many large-scale vehicle enterprises and related parts suppliers almost invariably choose to expand. However, since the previous year, the tricycle industry has begun to show signs of weak growth and declining consumption, and the speed is very fast. Due to the low average profit of enterprises, the scale effect has become the main way for enterprises to make profits, forming a vicious circle of expansion → price war → re expansion → re price war, which has a great impact on the sustainable development of the industry.


  In addition, the industry itself also began to enter a period of stability. After years of development, the tricycle industry has entered the mature stage from the growth stage. Its remarkable feature is that the product itself is becoming more and more mature, a large number of enterprises are reduced, and the phenomenon of individual brands monopolizing the market is becoming more and more prominent. As it was still in the period of industrial rise, enterprises also have relatively abundant profit space. However, with the downward trend of the market becoming more and more obvious, especially after the cruel price war, the profit space is further compressed and the operating cost is increasing day by day. Therefore, in the coming period, strong enterprises will take a more active way to seize the market share, and a large number of small and medium-sized enterprises will have to be eliminated due to the decline of profits or even losses.

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