Doubts cast over whether China can cut back huge coal and steel sectors as prices of commodities rebound
Massive overcapacity in nation’s steel industry source of friction with US and EU, amid allegations that cheap supplies from China are unfairly harming overseas manufacturers
China’s efforts to reduce overcapacity in the coal and steel sectors have recorded a slow start, casting doubts on whether the government can honour its pledge to trim down the two huge industries as the prices of the two commodities also start to rise.
President Xi Jinping has made reducing overcapacity a cornerstone of his economic reform policy since late last year, but China’s progress in curbing excessive production at coal and steel plants has fallen behind schedule.
China’s over production and export of steel has become a source of friction with the United States and European Union, with allegations that it is dumping cheap, subsidised steel on overseas markets, harming local manufacturers.
US President Barack Obama met with Premier Li Keqiang on Monday at the United Nations General Assembly in New York and urged China to continue addressing industrial overcapacity, according to a White House statement.
Beijing has set a target of cutting excess capacity in steel by 45 million tonnes and by 250 million tonnes in coal by the end of November.