Steel and coal capacity to be further slashed
January 30, 2017 Category Macro-economy, Weekly
After a reduction of 33 million tons in steel capacity last year, China’s Hebei province, aims to further slash about 32 million tons of steel capacity in the current year. “2017 will be our toughest year in capacity reduction,” said Governor Zhang Qingwei. Hebei produces a quarter of the country’s iron and steel. Coal-rich Shanxi and central Henan both set the targets of cutting 20 million tons of coal capacity this year. The two provinces each slashed 23 million tons of coal capacity last year. “Coal overcapacity reduction should be achieved through market means,” said Lou Yangsheng, Governor of Shanxi, adding that mergers and reorganizations would be encouraged. Hubei said that it would close all its coal production firms in two years, while Guizhou province will slash 15 million tons of coal capacity by closing 120 coal mines this year. Local governments will also focus on handling poor-performing zombie companies. Zhejiang province plans to close 300 zombie companies and 1,000 firms with outdated capacity this year, and Guangdong province aims to close 74 private zombie firms after it closed more than 2,000 state-owned zombie companies and 39 private companies in 2016. China achieved its 2016 target of cutting 45 million tons of steel and 250 million tons of coal production capacity, affecting nearly 800,000 workers, the China Daily reports.
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