NDRC to speed fuel pricing (3)

Overcapacity

The country will encourage mergers and acquisitions, eliminate outdated production and allow more companies to explore the overseas market to address industrial overcapacity, Zhang at the NDRC said.

Overcapacity has seriously plagued industrial sectors including steel, cement, electrolytic aluminum, plate glass and coal coke, which usually operate at 70 to 75 percent of their total capacity in China, Zhang told the press conference.

In the steel industry, for instance, the profit margin was only slightly higher than 1 percent, with many steel companies suffering losses, Zhang said.

"One efficient way to weed out outdated production capacity is to evaluate companies using a technol­ogy and emissions standard. Those who fail to meet the standard should be shut down or acquired by larger companies," Wang Guoqing, director at the Beijing Lange Steel Information Research Center, told the Global Times.

"The year of 2013 will see a wave of acquisitions and mergers in the steel industry," Wang said.

China will seek to bring 60 percent of the country's steel production under the control of its top 10 steel makers by 2015 and encourage large steel groups to acquire smaller firms in other regions, the Ministry of Industry and Information Technology said in January.