China Targets Overcapacity in Coal and Steel, Reveals Defence Budget

The Australian Financial Review

06 March 2017

China’s top economic planner said the country was determined to shut down idle and underused steel mills, coal mines and coal-fired power plants to tackle industrial overcapacity and reduce pollution.

At a press conference on the sidelines of China’s annual meeting of parliament, Ning Jizhe, deputy director of the National Development and Reform Commission, said while the government had outlined steel and coal capacity cuts in previous years, it was now also targeting coal-fired power generation.

China has vowed to eliminate more than 50 gigawatts of coal-fired power capacity, almost twice the total operating coal-fired capacity in Australia, by shutting down some plants and halting the construction of new ones. Mr Ning described this on Monday as a “gigantic” figure.

… “For the past two years we have seen spending increases of around 7 per cent, down from the annual average of about 9 or 10 per cent for the past 20 years, which suggests this is a trend,” said Richard Bitzinger, senior fellow at Singapore’s S. Rajaratnam School of International Studies.

“Perhaps the PLA has finally been told to tighten its belt the same as other government departments.”

Mr Bitzinger said the decision to leave the budget figure out of the work report suggested there may have been some last-minute jockeying over the final number.

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Last updated on 07/03/2017