China has vowed to cut steel capacity by 50 million tonnes and coal output by over 150 million tonnes this year, in an effort to revitalise its economy.
Multiple sources this week quoted deputy director of the National Development and Reform Commission of China, Ning Jizhe, who gave a press conference at the first parliamentary meeting of the year.
Ning reportedly said China will cut 50 gigawatts of coal-fired power capacity, and would also work to curb steel capacity.
“We are determined to remove outdated and excess capacity,” the economic planner was quoted as saying. “Only by doing so can we bring new life to our steel and coal sectors.”
Describing the figure as “gigantic,” Ning said coal-fired power capacity would be cut down through the closure of some plants, and through the halting of construction on others.
China is working to boost its reliance on renewable energy sources, and faces a severe coal-fired overcapacity, as aggressive building programs have resulted in an average of just 47% usage for existing plants.
Ning’s related steel announcement came after China revealed it spent only 7.6% more on defence last year – a major driver of steel consumption – despite increases of over 10% in prior years.
Some experts had anticipated China would boost defence spending after new Donald Trump vowed to boost US defence spending by 10% during the election.
But according to Xu Guangyu, a former People’s Liberation Army major general quoted by the AFR, China is not keen on matching defence spending with its Western counterpart.
“China is not interested in taking part in an arms race,” Xu was quoted as saying.
“The spending increase is in line with the economic growth rate.”