China to Investigate Coal and Steel Sector Expansions

China will send inspection teams to investigate and severely punish illegal expansion by coal and steel firms as part of its efforts to slim down the two industries, the country’s cabinet said on Thursday.

With most of the country’s steel and coal enterprises making losses in 2015, China promised in February to slash 500 million tonnes of coal production capacity and 100 million to 150 million tonnes of crude steel capacity over the next three to five years in a bid to reduce price-sapping supply gluts.

The State Council said in a notice posted on China’s official government website (www.gov.cn) that this year’s targeted closures had already been “basically completed”, but some firms were still illegally expanding capacity.

The cabinet named as culprits the Hebei Anfeng Steel Corp, based in the northern port city of Qinhuangdao, as well as a small steel plant in eastern China’s Jiangsu province.

China has traditionally struggled to rein in its massive steel and coal sectors, with local governments often turning a blind eye to expansion projects that provide additional local employment and economic growth.

via Reuters

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