China to release detailed rules for controlling steel capacity
Friday, 06 Nov 2009
Securities Times cited Mr Xiong Bilin an official of China National Development and Reform Committee as saying that "Detailed rules will be released within this year to curb capacity expansion in those sectors already suffered massive oversupply."
Mr Xiong said first principle of the rules is using more market mechanism and standards to guild and restrict those sectors' developments
1. Market access of energy consumption, environment protection and resources utilization etc would be enhanced further for steel, cement, plate glass and traditional coal and chemical industry, mainly targeting on pollution emission.
2. Environmental inspection would be strengthened. NDRC plans to join hands with Environment Protection Ministry to carry out environmental impact assessment on regional estate planning. And those high energy consumption and pollution projects in steel, cement, plate glass and multi crystal silicon sector would be definitely prohibited if they cannot pass the assessment.
3. Land supply and use would also be tightened. And sanction on the above six-sectors projects should all be examined and approved by NDRC instead of local governments.
Mr Xiong also explained current situations of industrial overcapacity like steel. Steel production in China posted at 500 million tonnes last year with capacity registering at 660 million tonnes without considering the 58 million tonnes under construction.
Therefore, total capacity last year exceeded 700 million tonnes. However, due to falling demand, total supply glut might hit 80 million tonnes this year. But output stays high at around 550 million tonnes and its 12% growth has exceeded domestic GDP growth in the same period.
