China may meet overcapacity-cut target in advance

BEIJING - China is likely to meet this year's targets early for reducing overcapacity in the coal and steel sectors, a Chinese official said Friday.

Li Pumin, secretary general of the National Development and Reform Commission, told a press conference that the steel industry had completed its annual target of reducing production capacity by 45 million tons by the end of October.

The coal sector is also likely to meet its annual goal of cutting capacity by 250 million tons in advance, Li said.

At present, both sectors have made encouraging headway in cutting overcapacity, which helps to improve corporate profitability, optimize structure and balance market supply and demand, he said.

Facing surging coal prices and short supply in some areas, Li added the country would coordinate coal, electricity and heating supply to stabilize market prices while firmly cutting overcapacity and adjusting the sector's structure.

Cutting overcapacity is one of the major tasks in the country's supply-side structural reform.

In May, the Ministry of Finance earmarked a special fund of 100 billion yuan ($14.68 billion) to subsidize local governments and state-owned companies in reducing steel and coal overcapacity.