Abstract: Government behavior is closely related to the formation of excess capacity， and is also the key to reduce the excess capacity， so it is necessary to explore a scientific and rational government behavior model. In this paper， government behavior is subdivided into the government ownership of state-owned property， the soft budget constraints and the government regulations so as to reveal its impact on the mechanism of excess capacity in theory. The cointegration method is used to measure the capacity utilization rate of various industrial sectors in China. The GMM dynamic panel model is built based on the panel data from 2006 to 2016 to reveal the relationship between government behavior and excess capacity. The results show that the proportion of state-owned shares and capacity utilization rate of the industry are inverted U-shaped， and there exists an optimal proportion of state-owned shares; the soft budget constraint level of the industry is positively correlated with the degree of excess capacity; the more emphasis the government places on the industry development， the higher the excess capacity in the industry; the expansion of the scale of the enterprise and the industry will increase the degree of excess capacity; improving the level of opening up will help to resolve excess capacity.

Key words: excess capacity, government behavior, proportion of state-owned shares, soft budget constraints