Jaway Stainless Steel

MIIT plan to reduce excessive capacity of steel and automobiles in China

China Ministry of Industry and Information Technology published a 2011 summer operation report of China industrial economy on September 13 saying that the excessive capacity caused by repeated investment in the heavy and chemical industries in recent years affects the industry sustained and healthy development. Meanwhile, there is a certain amount of backward capacity in many industries with excessive capacity problem.

Therefore, the ministry will continue to encourage the key industries like automobile, steel, non-ferrous metal, and building material to carry out M&As and integration of industry chains, improve the exit mechanism of backward capacity, establish and improve the capacity reduction and replacement measures for backward capacity of the industries with excessive capacity.

MIIT announced the targets to eliminate for the backward capacity by 2015, including 70 million tons of iron and six million tons of iron alloys. The targets from 2011 include 26.27 million tonnes of steel and 1.857 million tonnes of iron alloy, accounting for one third or one half of the 2011-2015 targets. But it does not mean the ministry will fulfill the targets in advance.