China to check capacity-eliminating efforts in cement, glass industries

BEIJING - Chinese regulators will inspect cement and glass factories to determine whether the two bloated sectors have taken serious efforts to eliminate outdated capacities.

From Feb 12 to Feb 22, eight inspection teams, headed by ministerial officials, will be sent to 31 provinces and regions across the country, according to the Ministry of Environmental Protection.

The inspection aims to find out whether government policies, including the phasing out of outdated technology and equipment, and the adoption of higher standards for pollutant emissions, are being effectively delivered.

The move is the latest sign that the government is determined to keep a tough stance on overcapacity after its successful capacity-cut efforts in 2016 helped to support economic growth.

For years, a wide range of industries in China, from steel, cement, aluminum and flat glass to coal, have been running at overcapacity.

The gluts have extensive implications: depressed commodity and material prices, reduced profits of debt-ridden firms, increased non-performing loans that jeopardize financial stability.

Last year, China introduced policies on fiscal and tax support, the handling of non-performing assets, redundancy support, and sought to encourage mergers and acquisitions in the bloated sectors.

By the end of the year, the capacity-cut targets in the most troubled coal and steel industries had been achieved ahead of schedule.

At the Central Economic Work Conference held in December 2016, China's policymakers continued to make addressing industrial overcapacity a major task for 2017.