Jan. 5 (Bloomberg) -- China's Shougang Corp., parent of the only publicly traded steelmaker based in Beijing, will cut its production by 4 million metric tons this year to improve the environment as the capital city hosts the summer Olympic Games.

Shougang Corp. will reduce its steel and iron output in the Beijing area on a ``step-by-step'' basis this year, its listed unit Beijing Shougang Co. said today in a statement to the Shenzhen stock exchange.

Shougang Corp. is building a 67.7 billion-yuan ($9.3 billion) steel works at the Caofeidian deep-water harbor in the northern province of Hebei as it moves its operations out of Beijing to help reduce pollution in the capital.

Beijing is using the Olympics as a reason to spruce up the city and improve living standards. The government said in May it would spend 25 billion yuan ($3.3 billion) last year on environmental projects for the first Olympics to be held in the world's most-populous nation.

The Olympics will take place Aug. 8-24. Beijing Shougang is China's second-biggest producer of construction-grade steel.

To contact the reporter on this story: Wang Ying in Beijing at ywang30@bloomberg.net

Last Updated: January 5, 2008 02:48 EST