Government Shows Urgency in Resolving in Cutting Excess Capacity in Steel and Coal Industry
Premier Li Keqiang reiterated the urgency and government’s resolve in cutting excess capacity in steel and coal industries as the country is striving to restructure the economy. China is cutting down crude steel production capacity by 100 to 150 million tons, although the State Council did not give any deadline for the said cut but pointed out that China had already cut its production capacity of crude steel by more than 90 million tons in the recent years.
Aside from cutting crude steel, China will be reducing the production capacity of coal by a large margin. Digesting overcapacity in steel and coal sectors is said to be an important measure in promoting the supply side structural reforms wherein the process will deliver the industries out of trouble and achieve upgrading. The production of crude steel fell 2.3 percent or 804 million tons in 2015 which is the first time the industry reported a negative growth in 34 years.
Any added capacity in crude steel and coal industries is strictly controlled and the government is fully aware of the importance and challenges in digesting excess capacity, adding that the government is introducing necessary measure in helping laid off workers cope with difficulties and to look for new employment.