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Renewed move to streamline bloated sectors

By Lyu Chang | China Daily | Updated: 2013-10-16 07:05

China is stepping up efforts to deal with overcapacity in five sectors, under guidelines released by the State Council, the country's cabinet, on Tuesday.

The industries with serious excess capacity - steel, cement, electrolytic aluminum, sheet glass and shipping - are the key targets, according to the guidelines posted on the government's website.

Steps to reduce excess production in each sector include blocking new projects, shutting down old facilities, reappraising projects under construction and closing illegal capacity.

China should also stimulate domestic and global demand, relocate plants overseas, restructure and merge companies and foster a fair market mechanism and environment, the guidelines said.

The move reflects the government's resolve to shift the economy away from investment in heavy industries, transform the structure of economic growth and boost industrial restructuring, experts said.

China is the world's biggest producer of steel, aluminum and cement. But overcapacity in several industries has depressed prices and crimped profit margins, causing slower economic growth.

Last year, the capacity utilization rate of the steel industry was only 72 percent. The rates were just 73.7 percent, 71.9 percent, 73.1 percent and 75 percent for cement, electrolytic aluminum, sheet glass and shipping. These were all far below international norms.

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