China: MIIT issues warning on new capacity

China: MIIT issues warning on new capacity
Published: 08 August 2014

Tagged Under: Restructuring China 

China’s Ministry of Industry and Information Technology (MIIT) has issued an emergency decree ordering regulatory departments across the country to stop the cement sector from adding new capacity. The move is in response to some local governments indiscriminately launching new capacity to spur a slowing economy, ignoring the country's restructuring efforts.

Policymakers have tried repeatedly in recent years to eliminate excess capacity in the cement sector as part of efforts to restructure the economy and reduce pollution. The decree also applies to easing capacity additions in the plate glass sector.

The MIIT said industrial regulatory departments should not approve any new projects in those sectors for any reason, warning that dissolving overcapacity will be a "long-term, arduous and complicated" task.

In the first half of the year, China's cement output rose 3.6 percent from a year ago to 1.14trn tonnes, according to data from the National Development and Reform Commission (NDRC).