"The most pressing task in adjusting economic structure for 2016 is to achieve the goal of capacity cuts," said Xu Shaoshi, minister in charge of the National Development and Reform Commission (NDRC) on the 2016 Summer Davos held in Tianjin on June 26, 2016.

Xu revealed for the first time that China has set the goal of cutting 280 million tons of coal output capacity and cutting the 45 million tons of steel production capacity on the same day.

Due to the capacity cuts in the steel and coal mining industries, 700,000 coal workers and 180,000 steel workers have to be relocated by the end of 2016.

Data released by the China's National Bureau of Statistics shows that during the first five months of 2016, China has produced 1,343,860,000 tons of coal, falling by about 116 million tons from the previous year. 

The local authorities attach importance to the production capacity cuts in the process of implementing supply-side reform. For instance, Guizhou plans to cut 70 million tons of coal mining production capacity over a period of three to five years.