Xinhua recently reported that, according to high ranking officials in the Ministry of Industry and Information Technology, the Ministry will jointly release, in conjunction with the Development and Reform Commission, an “overall resolution plan for overcapacity.” The plan is being finalized and will be officially put in place very soon. The plan will cover key industries and will take different approaches for different industries. The primary principles that this grand plan follows are: (1) expanding domestic market consumption; (2) moving production capabilities overseas; (3) reorganizing existing companies for optimized output; and (4) retiring high energy consumption and high pollution manufacturers. Focal controls will be applied to industries like steel, cement, electrolytic aluminum, and flat glass. Environmental protection rules will play a very significant role in this round of policy implementation. The China Banking Regulatory Commission (CBRC) is also involved in the planning process to ensure that necessary financial support can be arrange for adjustments required in various industries.
Source: Xinhua, August 20, 2013