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China moves to spur coal overcapacity cut

Updated: Aug 11,2016 7:54 PM     Xinhua

BEIJING — China’s top economic planner ordered local governments to speed up measures of cutting excess coal production capacity as the progress was slow.

“Local governments should strive to fulfill their targets by the end of November, while central and provincial state-owned coal producers should complete in the early part of that month,” Lian Weiliang, deputy head of the National Development and Reform Commission, said when addressing an internal meeting.

Lian’s remarks followed data that showed that by the first seven months China had only achieved 38 percent of its coal-production reduction goal. Around 250 million tonnes of capacity should be reduced this year.

“Currently, progress clearly lags behind our official schedule,” he said.

Lian mentioned underperforming regions during the meeting. There has been no practical progress in Inner Mongolia, Fujian, Guangxi, Ningxia and Xinjiang, while Jiangxi, Sichuan and Yunnan have finished less than 10 percent, he said.

Authorities must strengthen enforcement, Lian said, adding that punitive measures including forced shutdowns can be taken on factories that dawdle.

China is the world’s largest producer and consumer of steel and coal. The two industries have long been plagued by overcapacity and have felt the pinch even more in the past two years as the economy cooled and demand has fallen.

The government has made reducing excess capacity a top priority, with plans to cut steel and coal capacity by about 10 percent — as much as 150 million tonnes of steel and half a billion tonnes of coal — in the next few years.