China Appeals to Provinces to Support Capacity Reduction, Eradicate “Zombie” Companies
08/21/2018 - The federal government of China has increased pressure on local governments to abide by capacity-reducing measures and efforts to eliminate so-called “zombie enterprises,” according to the Reuters news service.
On Tuesday, the Chinese Ministry of Commerce released an official statement imploring its provincial-level governments to avoid setting policies that could stall plans to stem excess capacity. It also urged local governments to not hinder the closure of “zombie enterprises,” companies that are financially unsustainable without government subsidy, Reuters reported.
The Hebei province, China’s top steel-producing region, has promised significant cuts to its capacity in the very near future. According to the English-language edition of the Chinese newspaper The Global Times, Hebei plans to cut 10 million metric tons of steel capacity by the end of 2018.
