Vice governors take rap for steel industry overcapacity

Vice governors from Jiangsu, Hebei given warnings as steel producers seek to expand despite government drive to cut capacity

PUBLISHED : Monday, 26 December, 2016, 7:59pm
UPDATED : Monday, 26 December, 2016, 7:59pm

The State Council has issued warnings to two vice governors from Jiangsu and Hebei after it was revealed that steel companies in the two provinces were still seeking to add capacity despite the government’s plans to cut steel production.

State investigators last month found that Jiangsu Huada Iron & Steel and Hebei Anfeng Iron & Steel had violated regulations for the steel industry. Hebei Anfeng was producing steel before receiving formal approvals on its project, whereas Jiangsu Huada was found to be producing and selling steel bars without obtaining approval.

To win market economy status, China must cut steel overcapacity

The State Council and the Central Committee of the People’s Republic of China had issued an administrative demerit record to Jiangsu vice-governor Ma Qiulin and an administrative warning to Hebei vice-governor Zhang Jiehui. A further 111 personnel from Jiangsu and 27 from Hebei were also to be held accountable for the breach of regulations.

Jiangsu and Hebei provinces have been ordered to rectify the unapproved steel capacity in both companies. Blast furnaces of less than 1,000 cubic metres and converters of below 100 tonnes at Hebei Anfeng were also to be dismantled.

China planned to cut steel production capacity 45 million tonnes this year, and was expected to achieve the goals ahead of schedule, according to the National Development and Reform Committee. Cutting a capacity glut is high on the government’s agenda following years of overcapacity in the industry and its adverse impact on China’s economic growth.

More than 80 per cent of its goal to cut steel and coal production had been attained at the end of September, the committee said.