China will spend 100 billion yuan ($15.25 billion) every year for up to five years to address overcapacity in its beleaguered steel and coal industries, Chinese media said.
It said most of the money will be spend on relocating employees, adding that there will be no minimum financial allocation for the coal industry.
Steel and coal have the largest inventories in China, to address this no new projects are being given the go ahead, outdated production facilities are being shut down, and “zombie” companies are being forced to shut, Xinhua said.
“The steel and coal sectors should take the lead in cutting overcapacity, reducing costs and improving efficiency,” Premier Li Keqiang was quoted as saying at a State Council this week.
The plan is to relocate 1.8 million employees in the coal sector, while 360 million tonnes of outdated production capacity will be removed.