Chinese official calls for speeding up capacity cuts

A top Chinese official on Friday called for accelerating capacity reduction work in the steel and coal industries as progress remains slow in some regions.

Lian Weiliang, deputy head of the National Development and Reform Commission, did not mention which regions were lagging at Friday's press conference. However, in an earlier internal meeting, he identified Inner Mongolia, Fujian, Guangxi, Ningxia and Xinjiang as having disappointing results.

Lian described 2016 as the key period for advancing the country's capacity reduction target, which is to cut steel and coal capacity by about 10 percent in the next few years.

By the end of July, China had only achieved 38 percent of its goal for coal-production cuts and 47 percent of its steel reduction target for the year.

In a demonstration of government resolve on the issue, the State Council has decided to carry out a nationwide inspection of local efforts starting next week, according to Lian.

China is the world's largest producer and consumer of steel and coal. The two industries have long been plagued by overcapacity and have become a major drag on China's growth in recent years.

As part of efforts to slim down the two sectors, China's Ministry of Finance announced in May 100 billion yuan (15.1 billion U.S. dollars) in aid for steel and coal companies to resettle laid-off workers.

So far, some 30.7 billion yuan had been allocated, Lian said. Endi