1st Ld-Writethru: China steel, coal capacity cut target "basically" achieved

China has "basically" achieved this year's steel and coal capacity reduction goals, according to a State Council statement.

A statement released after a State Council executive meeting presided over by Premier Li Keqiang spoke highly of the results while noting problems such as uneven progress and certain companies seeking to add capacity.

China is the world's largest producer and consumer of steel and coal. Cutting overcapacity is high a priority as the two industries have become a major drag on growth.

Steel capacity is to be cut by between 100 and 150 million tonnes by 2020, including 45 million tonnes this year. This year's coal target was 250 million tonnes.

As the task has finished ahead of schedule, the next step is to ensure the stated cuts are effective. The State Council will send investigators to Hebei and Jiangsu provinces to probe into cases where capacity cut rules were breached.

In recent months, capacity cuts are said to have helped recovery in both steel and coal prices.

The statement asked local governments to give financial support to and create jobs for workers made redundant by the cuts. In May, the Ministry of Finance announced 100 billion yuan (14.5 billion U.S. dollars) of aid for steel and coal companies to resettle laid-off workers.

Mergers and acquisitions will be encouraged for further consolidation in the two industries, the statement said.

The meeting also canceled 114 administrative approval items on professional qualifications and passed a draft revision to the law on unfair competition. Endi