Eight keywords of China's economy in 2016

5.Cut excessive industrial capacity

China aims to proactively and prudently tackle industrial overcapacity, which requires enterprises to take part as the main player and government promotion under the market-oriented and legal principle. China will also strictly control additional capacity to avoid a new round of gluts.

"It can be said that today's overcapacity issue is a result of poor effective demand in one aspect and insufficient supply in another.

"In future implementation, it’s foreseeable that we will not only reduce overcapacity in industries including steel and iron, cement, electrolytic aluminum and plate glasses, but put more emphasize on increasing effective investment and enhancing the supply of quality products in areas of social security, health care and environmental protection through necessary fiscal support. In this way, we can explore new economic engines while mitigating structural shortage of relevant products as well as realize the true purposes of supply-side reform”.

- Quan Heng, economist with the Shanghai Academy of Social Sciences

A steel factory stands idle against the sunset on Dec 26, 2015. The factory run by Hangzhou Steel Co would be officially shut down in two days. [Photo/IC]