China’s economic planning agency said Friday it will revamp the nation’s inefficient cement industry with new rules that will cut the number of companies from 5,000 to 2,000 by 2020.
The new rules are intended to eliminate redundant projects and are part of the government’s strategy of tightening lending to prevent the economy from overheating.
The National Development and Reform Commission said on its Web site the streamlined industry will include 10 big cement producers with production capacity of more than 30 million tons.
The new regulations will require cement companies to have enough internal funding to cover 35% of any new project that requires a bank loan.
The planning agency said its new rules will tackle structural problems in the cement industry that include inefficiency, slack management, low labor productivity, environmental pollution, and outdated equipment.
The statement didn’t indicate how many jobs could be lost as a result.
The rules came a day after Beijing released statistics that showed the Chinese economy is cooling, with 10.4% growth in the third quarter, down from 11.3% growth in the second quarter.
Officials said the slower growth shows tightening measures are having an effect.