19 industries to shed capacity

Some iron and steel mills, one of the 19 industries suffering from overcapacity, will be closed as the country moves to upgrade its industrial structure and the overall economy. LIU DEBIN / FOR CHINA DAILY

Move marks the government's determination to cut overcapacity, reform economy

The Ministry of Industry and Information Technology has ordered the closure of many factories in 19 industries where overproduction has led to price-cutting wars, affirming its determination to push ahead with a painful makeover of the economy.

More than 1,400 companies in 19 industries in China were told to cut production capacity, according to a statement by the ministry on Thursday.

Cement, steelmaking, ferroalloys, electrolytic aluminum, copper smelting, chemical fiber and papermaking are among industries required to cut excess capacity. Papermaking and cement are the two industries that involved the largest number of companies in the latest campaign.

Local governments and companies were ordered to stop production by the end of September. The deadline for elimination was set for the end of this year, the ministry's statement said.

Nineteen public companies were on the list. Shares in BBMG Corp, Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co and Shandong Chenming Paper Holdings Ltd slid more than 2 percent after they were cited on the list.

The benchmark Shanghai Composite Index slipped 0.51 percent to 2,010.85 on Friday. The SZSE Component Index dropped 0.65 percent to 7,843.36.