Market forces must guide China’s industrial capacity cut, says finance minister

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China will continue to cut excess production capacity, but will rely on market forces and not government-set targets, the finance minister said.

China has attached great importance to cutting industrial overcapacity, and that measures have been taken to eliminate 90 million tonnes of steel production capacity, Xinhua quoted Lou Jiwei as telling media as the annual high-level dialogue between the United States and China began in Beijing.

Lou ruled out the possibility of working out a quantitative target initiated by the government.

“China has bid farewell to the planned economy, so the government can not dictate to industries on this. More than half of the country’s steel makers are privately owned,” he said.

While stressing market forces, the minister said the government will also strengthen supervision on environmental protection, energy saving and ensure high quality and security, as well as provide fiscal support to aid laid-off workers.

The eighth China-U.S. Strategic and Economic Dialogue comes at a time when excess steel capacity has become an acute global challenge.

The United States has launched anti-dumpimg invetigations aainst Chinese steel makers after complaints from its domestic industry.

U.S. steel producers are increasingly resorting to trade remedies and tariff protection to ride out a sluggish steel market, a practice strongly opposed by Chinese exporters, Xinhua said.

 

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