Industry structure adjustment strategy focuses on "mergers and acquisitions"

For many years of rapid development, China's oil and chemical industry has reached a period of urgent need for industrial upgrading. Especially in the current economic ups and downs, it highlights the fact that mergers and acquisitions have eliminated backward production capacity, optimized resource allocation, and increased industrial concentration. Promote the prominent role of the survival of the fittest. This is the consensus reached by the top executives of the 5th annual meeting of the China Chemical Industry Council’s fifth annual meeting of the China Chemical Industry M&A Summit held in Beijing on October 31st.
Against the backdrop of the financial crisis, some industries exposed the outstanding issues of overcapacity, low industrial concentration, unreasonable industrial structure, weak innovation capacity, and constraints on resources and environment. Li Yongwu, president of China Petroleum and Chemical Industry Association pointed out that current and future For a period of time, only when we are determined to pay close attention to the major adjustments in industries, products, and corporate structures can we adapt to the requirements of economic globalization and ensure the sustainable development of the industry.
Representatives of the conference generally stated that the industry's large-scale operations through mergers and acquisitions are effective strategies for enhancing the competitiveness of the international market, increasing market share, and making it bigger and stronger. From this point of view, the current mergers and acquisitions can promote the structural adjustment and optimization of the industry from two aspects. On the one hand, the existing industries can be expanded, and on the other hand, a new business platform can be built. Enterprises can continuously optimize asset structure and improve asset quality in the process of M&A and restructuring. However, there are two issues that must be paid attention to in the M&A process. First, we should focus on the main business and guide the company's development strategy. Second, we must pay attention to the integration of corporate culture after M&A.
Representatives of resource-based industries also pointed out that merging and coupling of resources and products should be implemented in mergers and acquisitions, and they should be linked and supported. Taking the phosphate fertilizer industry as an example, the control and effective allocation of phosphate rock resource elements is the key.
Wang Zhile, a research fellow at the Ministry of Commerce, pointed out that a country's industry can only truly enhance its competitiveness if it absorbs resources, integrates resources, and integrates into the global industrial chain. Therefore, we should actively promote mergers and acquisitions among domestic chemical companies, mergers and acquisitions of foreign capital, domestic chemical companies, and domestic enterprises to "go global" and acquire overseas chemical companies.
Yao Jingyuan, chief economist of the National Bureau of Statistics, pointed out that China's economic trend will show a V-shape, and it has already passed its lowest point. The goal of achieving "guaranteeing eight" this year is no longer a problem. The real problem is structural adjustment. Therefore, only if the process of overcoming this crisis is regarded as an opportunity to transform the mode of economic growth, enhance the capacity for independent innovation, and optimize the structure, can the Chinese economy maintain a sound and rapid growth over the long term.
Dong Jianyue, chairman of Guangdong Development Bank, said that at the end of last year, the China Banking Regulatory Commission issued the “Guidelines for M&A Loan Risk Management of Commercial Banks” to allow eligible commercial banks to set up M&A loan businesses, providing support for domestic companies “going out” to implement mergers and acquisitions. In the next few years, China is likely to become one of the most active regions for global mergers and acquisitions.

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