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China to punish provincial governments upon failure of coal, steel capacity cuts

Provincialgovernments in China are compelled to submit phase-out plans for inefficient coal mines and steel mills by the end of themonth and set capacity reduction targets by July 15, Bloomberg News reportedJuly 8, citing Xinhua News Agency.

In areport by Xinhua, Chairman of National Development and Reform Commission, XuShaoshi, noted that provinces that fail to achieve their reduction targets willbe "seriously punished," Bloomberg wrote.

Jobcuts in the coal and steel industry this year are expected to reach 800,000,while over three to five years, it is estimated at a massive 1.8 million forboth industries, said Bloomberg, citing the Ministry of Human Resources andSocial Security.

Accordingto Xu, China's coal capacity cut target this year was reduced to over 250million tons from a previous 280 million tons, while steel capacity is expectedto contract by 45 million tons.

Duringthe first five months of 2016, coal output tumbled 8.4% while steel productionslipped 1.4%, according to the report.