China vows to tackle overcapacity

China has vowed to tackle overcapacity and pursue innovation-driven growth, said a statement issued Friday after the four-day Central Economic Work Conference closed.

"Unswerving efforts will be made to tackle overcapacity, and the central government's decisions and arrangements on the issue should be implemented without compromise," the statement said.

The statement noted that the way to resolve overcapacity is through innovation, as the country continues to see adjustment of industrial structure as one of its core tasks for economic development in 2014.

China should combine the goals of letting the market play a decisive role in allocating resources and letting the government play a better role, and eliminate incompetent players through the means of competition, the statement said.

The government should impose stricter standards for environmental and safety-concerned issues and strengthen enforcement of laws and regulations, it said, adding that behaviors leading to environmental and ecological damage should be punished severely.

On the other hand, more efforts will be made to develop strategic emerging industries and step up the updating of traditional sectors, said the statement.

The government will create an environment for enterprises to spearhead innovation, strengthening intellectual property rights protection and improving tax incentives.

Some industrial sectors have been hit by weak demand and falling prices while suffering from outdated production ability, pushing their profitability down to dangerously low levels and jeopardizing long-term development.

Measures have been taken to tackle the problem as the leadership repeatedly warned against the consequences of worsening overcapacity.

In July, President Xi Jinping urged that tackling overcapacity should be a priority, with more efforts to boost industrial restructuring.

Some 1,400 companies in 19 sectors, including steel, cement, electrolytic aluminum, plate glass and shipbuilding, were ordered by authorities to get rid of outdated production capacity by September and eliminate excess capacity by the end of the year.