China to Cut Steel Capacity by 50 mln Tonnes, Coal by 150 mln Tonnes

China will push its drive to cut overcapacity in bloated sectors, with targets to slash steel production capacity by around 50 million tonnes and coal by at least 150 million tonnes this year, according to a government work report available to the media Sunday morning ahead of the annual parliamentary session.

The report pledged to make more use of market- and law-based methods to effectively deal with "zombie enterprises."

Tackling overcapacity, a key part of China's supply-side structural reform, has been high on the government agenda since the end of 2015.

Last year, China eliminated steel production capacity by more than 65 million tonnes and coal by over 290 million tonnes, both beating government annual targets.

Thanks in part to the efforts, China's broader economic growth showed increasing signs of stabilizing since the latter half of last year, with indicators such as factory prices and industrial profits seeing significant improvements.

For years, a wide range of industries in China, from steel, cement, aluminum and flat glass to coal, have been running at overcapacity, which have become an increasing drag on the economy.