China to cut steel capacity by 30m tons, coal by 150m tons in 2018

BEIJING — China will cut ineffective steel capacity of 30 million tons and coal capacity of 150 million tons in 2018, according to a government work report available to media before the annual parliamentary session on the morning of March 5.

Meanwhile, coal-fired power generating units with a capacity of less than 300,000 kilowatts that fail to meet standards will be closed this year, according to the report to be delivered at the first session of the 13th National People’s Congress.

Cutting overcapacity in bloated sectors like steel and coal has been high on the government work agenda in recent years as gluts of production ate into corporate profit and dragged economic growth.

China slashed over 50 million tons of steel capacity and 250 million tons of coal last year, both outperforming the annual targets.

China will strengthen work on “zombie enterprise” bankruptcy liquidations and reorganization, and ensure that affected employees are given assistance and debts are dealt with, the report said.

Measures such as reorganization among industrial players helped steel and coal sectors gain strength last year, with impressive improvements in factory price and corporate profit.

The country will also act faster to reduce excess food stockpiles, the report added.