Harbin Power Equipment, one of the nation's three largest producers of power generation equipment, plans to cut output this year by 10 per cent to 20 per cent after customers delayed delivery or pulled orders.
General manager Qu Dazhuang said the company had examined its order book and decided to take out some of its production to reduce risk.
'Given market uncertainty, we have prioritised production for power projects that have received government approval and have secured financing,' he said a day after Harbin unveiled a worse than expected 31.82 per cent net profit fall for last year.
Mr Qu said a few customers had cancelled orders, including China Power Investment Corp's Tuerqi power project, and orders for a 1.2 gigawatt project in Russia had been halved.
China was expected to add only 70 GW of new power generating capacity this year, down 23 per cent from last year, Harbin Power said in its results announcement.
Consistent year-on-year declines in power demand since last October amid the global financial crisis and a plant construction binge in previous years resulted in oversupply, prompting power producers to slow building of new plants.