The electrolytic aluminum and other industries with serious excess capacity will implement capacity replacement

According to news from Beijing on July 31, the Ministry of Industry and Information Technology of China stated that steel, electrolytic aluminum, cement, flat glass and other industries with serious excess production capacity will implement equal or reduced replacement of production capacity and ensure new (reform, expansion) construction. The project will not add capacity.

The press release published on the website of the Ministry of Industry and Information Technology on Thursday stated that it was clear that only those companies included in the announcement of the Ministry of Industry and Information Technology in 2013 and later eliminated outdated and surplus production capacity before they could be used for new (reconstruction, expansion) project capacity replacement, and reuse. The outdated production capacity that has exceeded the time limit for the state's explicit elimination cannot be used for capacity replacement.

"Implementing equal or reduced replacement of production capacity is a policy for 'outside the way'," said the Ministry of Industry and Information Technology.

The Ministry of Industry and Information Technology expressed that it is necessary to take into account the actual needs of local development of the economy, industrial upgrading and adjustment of the layout, and overall arrangements for the relationship between elimination and withdrawal and transformation and upgrading, and to mobilize the enthusiasm and initiative of localities and enterprises. The replacement of production capacity will not only facilitate the elimination of backward and excess production capacity, but also facilitate the adjustment and upgrading of inventory capacity and layout optimization, in particular, control of total production capacity, avoid “overdue and surplus”, ease local economic development, eliminate backward production capacity, and eliminate production capacity. Excessive contradictions, promote work as quickly as possible.

The Ministry of Industry and Information Technology requires that all new construction, reconstruction and expansion projects in the steel, electrolytic aluminum, cement, and flat glass industries must formulate capacity replacement programs to meet the requirements for equal or reduced replacement and achieve total capacity control. At the same time, it will guide local governments to speed up the elimination of backward and surplus production capacity, release resources, environmental capacity and market space for the implementation of new projects, and promote the optimization of industrial layout and structural upgrading. Adhere to market regulation and government guidance combined. In accordance with the decisive role of market allocation of resources and better fulfillment of the role of the government, in the replacement of production capacity, all localities are encouraged to explore and implement capacity index trades that are government-led, voluntary, and market-oriented, play a market role, and support cross-regional production capacity. Replacement improves resource allocation efficiency.

Taking into account the differences in resource advantages and environmental capacity in different regions, differentiated treatment of capacity replacement is implemented. For environmental sensitive areas such as the Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Pearl River Delta, reductions and replacements will be implemented, and other areas will be replaced by equal amounts.

The capacity replacement program for the cement and flat glass industries was confirmed by local governments, while the capacity replacement program for the steel and electrolytic aluminum industries was confirmed by the Ministry of Industry and Information Technology.

“The replacement of production capacity by equal or reduced capacity is a transitional measure that prohibits new production capacity, controls total production capacity, and gradually resolves the problem of overcapacity in the case of severe overcapacity in some industries. It is not a permanent policy. The Ministry of Industry and Information Technology said.

In response to the serious overcapacity problem in China, Huang Qunhui, head of the Institute of Industrial Economics of the Chinese Academy of Social Sciences, previously stated that resolving excess capacity is the focus of current and long-term transformation of economic development methods and the promotion of industrial restructuring; Seventy percent of companies believe that the overcapacity solution needs more than three years.