Bank loan is one of important sources of business investment. On the basis of measuring the capacity utilization rate of Chinese manufacturing enterprises, this paper deeply studies the relationship between bank credit preference and overcapacity, especially the action mechanism of the size of bank loans and enterprise heterogeneity influencing the capacity utilization rate. The empirical test shows that there is a significantly negative correlation between the scale of loans and the capacity utilization rate, which means the excessively high loan scale is an important factor that causes the low capacity utilization rate of Chinese manufacturing enterprises. Only by reducing the loan scale can we effectively curb the enterprises’ over-investment tendency and improve the capacity utilization rate. It is found that this feature is heterogeneous among different types of companies. As a result, in the process of governance, financial regulators should appropriately control the bank credit preference and credit discrimination, constantly optimizing the credit structure while controlling the size of bank loans. we should reduce the scale and proportion of loans given to state-owned enterprises and foreign-invested enterprises, while increase those given to collective enterprises and private enterprises. At the level of enterprise scale, we should reduce the scale and proportion of loans given to small enterprises, while increase those given to large and medium-sized enterprises. At the level of government relations, we should reduce loans given to enterprises with strong government ties and those without government relations, while increase loans scale of enterprises with weak government ties. This result has important implications for improving the investment structure from the supply side of business investment and effectively addressing overcapacity.
