China says to continue subsidising its bloated steel, coal industry

China said it will give subsidies of 100 billion yuan ($15.3 billion) to its bloated steel and coal firms even as it came under fire from several countries for dumping cheap steel into their markets.

The ministry of finance said the funds will be used to resettle laid-off workers, while mergers, acquisitions, debt restructuring and bankruptcy should get rid of unprofitable companies.

China should also take “a combination of measures” to resolve overcapacity, including tax, land, fiscal and financial reform, the statement said.

In the past three years, China has eliminated more than 90 million tonnes of steel capacity and over 200 million tonnes of coal capacity, Xinhua news agency said.

China, the world’s biggest producer and consumer of steel, has said it would eliminate 100-150 million tonnes of capacity in the next five years.

 

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