On Jan 4, Premier Li Keqiang visited coal and steel enterprises in Shanxi province amid efforts to cope with the downward economic pressure, showing the government’s determination to reduce industrial overproduction and overcapacity.

In the eyes of many observers, the Premier’s New Year visit illustrates an expectation of the development of the economy and economic policies.

As a province rich in coal, the overproduction and overcapacity of coal and steel is now a drag on the region’s economy.

The state of Shanxi’s economy is in fact a miniature of the country’s economic development amid downward pressures.

In the “golden age” of the coal industry, Shanxi’s economy witnessed rapid development. But in the last three years, its economy suffered a sharp decline as the provincial GDP fell from 8 percent to 2.7 percent.

To show confidence and determination, the Premier picked Shanxi as the first place to inspect in the new year.

The first stop of his visit in Shanxi was Taiyuan Iron and Steel Group Corp (TISCO), the world’s largest stainless steel manufacturer.

After being briefed about TISCO’s production, product structure, employment, and profits, the Premier said that in order to face a tough situation, diversified efforts should be made not only in transforming traditional industries but also cultivating new industries.

“I believe you will overcome the difficulties. It takes effort to forge high-quality steel, and superior capacity should prevail. I hope TISCO will rejuvenate with your ‘stainless’ spirit and wisdom,” he said to the TISCO workers.

Amid the downward pressure, TISCO is undergoing reforms and exploring new ways to cope.

It is expected to bring in 90 billion yuan ($13.7 billion) in revenue in 2016 with production of 10.4 million tons of steel, among which 4.2 million tons are stainless steel, according to Li Xiaobo, head of TISCO.

“Just as the Premier said, we should actively take the opportunities and build up competitiveness under the context of the New Normal. Otherwise, the market will kick you out,” he said.

During his visit in Shanxi, Premier Li also stopped at the Guandi Mine of the Shanxi Coking Coal Group in Taiyuan.

Going down into the 300-meter mine, he encouraged the coal workers, saying that “they are not only the backbones of Shanxi province but also the cornerstones of the country.”

Li Jin, an expert on State-owned assets, said the Premier’s visit to Shanxi shows the central government’s determination to reduce overproduction and overcapacity.

“Reduction of overproduction and overcapacity as well as supply-side reform are priorities of the five targets put forward at the central economic working conference. The steel and coal enterprises the Premier visited are the priority among priorities,” he said.