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Business / Policy Watch

China to cut crude steel production capacity by 150m tons: premier

(Xinhua) Updated: 2016-01-25 10:53

BEIJING -- Chinese Premier Li Keqiang has reiterated the urgency and the government's resolve to cut excess capacity in steel and coal industries, as the country strives to restructure its economy.

"China will cut crude steel production capacity by 100 to 150 million tons," according to a statement issued on Sunday after an executive meeting of the State Council chaired by Premier Li on Friday.

The State Council didn't specify the deadline for such cut, but pointed out that China has cut its production capacity of crude steel by more than 90 million tons in recent years.

China will reduce the production capacity of coal by "a relatively large margin," according to the statement.

"Digesting overcapacity in steel and coal sectors is an important measure to promote the supply-side structural reforms," the statement said, adding that the process will deliver the industries out of trouble and achieve upgrading.

China's production of crude steel fell 2.3 percent to 804 million tons in 2015, the first time the industry reported negative growth in 34 years.

Any newly-added capacity in crude steel and coal industries will be "strictly controlled," the statement said.

The government should be fully aware of the importance and challenges in digesting excess capacity, the statement said, adding that the government will introduce necessary measures to help the laid-off workers cope with difficulties and find new employment.

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