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China determined to cut industrial overcapacity

11-05-2013 16:32 BJT

By CCTV reporter Wang Yiqian

China’s central ministries have released a stern warning to companies implementing new projects suffering from overcapacity. Across the steel, aluminium, shipbuilding and cement sectors, industry battling excess supply has been put on notice.

The chronic overcapacity problem in China is being solved.

Officials from the National Development and Reform Commission have stressed the importance of developing industry access standards and ensuring environmental protection.

"We’ll promptly work out the new price system for electrolytic aluminium and also promote the industrial restructuring of steel industry in Hebei and Shandong provinces." Said Hu Zucai, vice minister of NDRC.

Meanwhile, the Ministry of Industry and Information Technology also said that new projects having severe excess capacity should be cancelled.

"We’ll try to phase out backward production capacities, including 15 million tons of iron, 15 million tons of steel, 100 million tons of cement and 20 million weight of flat glass." Said Zhu Hongren, chief engineer of MIIT.

Besides, China’s banking regulator has warned of the potential risk of a rise in bad loans from industries facing overcapacity. The Banking Regulatory Commission has called on increasing credit quota.

"Credit standards should contain environmental aspect and social management, including carbon emission index and production safety index." Said Shang Fulin, chairman of China Bainking Regulatory Commision.

Shang added that any form of new credit is prohibited for new projects in industries with overcapacity, and banks should not provide funds by issuing wealth management products.

 

Editor:James |Source: CCTV.com

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