The State Council released a document on Feb 4 aimed at solving overcapacity in the steel and iron industries, together with an effort to promote the development of enterprises in the field.
With downward pressure and contracted market need for steel and iron in recent years, problems concerning production overcapacity surged, and deficits of some enterprises have been increasing, according to the document.
To solve these problems, the central government decided to cut crude steel capacity by 100 million to 150 million tons within five years starting this year, with an aim of facilitating the merger and reorganization of steel plants, optimizing industrial structure and helping enterprises gain profits.
The document lays out measures including prohibiting any regions or departments for approving new steel projects. Those enterprises which cannot meet certain standards should be guided to drop out of the market according to laws or through incentive policies. In addition, local authorities are required to promote intelligent manufacturing and high-end quality products to facilitate an industrial upgrade.