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China Pledges Steel, Coal Capacity Cuts in Supply-Side Reforms

  • Targets steel capacity reduction of up to 150 million tons
  • China struggling to cut excess capacity as economy slows
Smoke billows from smokestacks and a coal fired generator at a steel factory in Hebei, China.

Smoke billows from smokestacks and a coal fired generator at a steel factory in Hebei, China.

Photographer: Kevin Frayer/Getty Images

China is targeting further cuts in crude steel production capacity by as much as 150 million tons and “large scale" reductions in coal output as part of supply-side measures aimed at curbing overcapacity and excess labor in state-owned industries.

The country has lowered steel production by about 90 million tons "in recent years" and will push to cut a further 100 million to 150 million tons, while "strictly controlling" steel capacity increases and halting new coal mine approvals, according to a Sunday statement on the Chinese government’s website, citing a State Council meeting on Jan. 22 chaired by Premier Li Keqiang. No time line was mentioned.