Steel Industry Brings Down Consolidation Target of its Steel Production
By 2015, China will be dropping its long standing target to bring 60 percent of its steel sector under control from its 10 biggest enterprises, a goal that is being criticized for causing a build up of unprofitable capacity. In the past the country is accused of strong arming State firms in pursuing unprofitable mergers, which included the takeover of Benxi Iron and Steel by a bigger local rival Anshan Iron and Steel.
China is now changing its way in its regulating the economy and is now aiming o stop interfering directly in approving and construction of industrial projects and then focus on regulating macroeconomics. Based on a new industry consolidation plan has published on the Ministry of Industry and Information Technology website stated that the country will continue to simplify approval procedures and will make it easier for firms in bloated sectors to finance acquisitions.
Although the plan will not include the target which was mentioned in its official policy documents last January 2013 which placed 60 percent of the total steel production capacity of China in the hands of the country’s top 10 steel mills by the end of 2015 which is up 40 percent from which they control now. Local officials are acknowledging attempts in forcing industries into complying with the targets that the State have deemed counterproductive.