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To: Stoctrash who wrote (44066)	8/22/1999 10:35:00 AM
From: John Rieman	Respond to of 50808

China takes steps to curb VCD glut.................. No new VCD lines to be approved............ chinadaily.com.cn Oversupply to be curbed THE State Economic and Trade Commission announced on Wednesday that no new project producing VCD players, refrigerators, air conditioners and some other goods for everyday consumption will be approved after September 1. Keenly realizing the severity of the ongoing economic slowdown, the State finally decided to take firm action to curb redundant production. There is a glut of these products in the domestic market nowadays. For instance, in the area of VCD players, producers have resorted to cut-throat competition for survival. While increasing their output to reduce fixed costs and pursue economy of size, producers slashed prices drastically, not only eroding their profits but also pulling down the country's consumer price index to aggravate deflation. Under such circumstances, to bring the national economy back to the track of growth, the efficiency of enterprises must be first improved. To this end, overcapacity in some industries must be substantially reduced. So, it is wise for the State to cut off the source of overcapacity by banning new projects in industries troubled by overproduction. However, in the meantime, concerned enterprises should not breathe a sigh of relief, mistaking the State's decision for mere protection of them from new competitors. The new decision is an effort made by the State to create a better climate for industrial reorganization. (Xin Bei) redundant production capacity to be closed............... chinadaily.com.cn