Cross-posted from Investing in Chinese Stocks.
Steel and coal were winners in 2016 and now China is easing back on planned production cuts.
The subject of the Chines article below article is this Bloomberg Businessweek article written by Li Keqiang: China Premier Li Keqiang: ‘Economic Openness Serves Everyone Better’
In 2016, China shed more than 65 million and 290 million tons of inefficient steel and coal-mining capacity, respectively. We plan to raise those numbers to 140 million and 800 million tons within the next three to five years to restore healthier fundamentals to those industries.
Hmm, except the Chinese media tells us these are target reductions, not increases.
iFeng: 李克强外媒刊文修正中国钢铁煤炭去产能目标
At the end of January 2017, Premier Li Keqiang in the “Bloomberg Business Week” published entitled “open economy for the benefit of the world,” the signed article. Referring to the supply side of the structural reform, Li Keqiang pointed out that China in 2016, respectively, reduced by 65 million tons and 290 million tons of excess backward steel and coal production capacity, for which there will be 700,000 steel and coal practitioners.
This is the first time that the Chinese government has released a report on its production capacity, with a reduction of more than 45 million tons of steel and 2.5 million tons of coal in 2016.
In the signed article, Li Keqiang clear China’s production capacity to road map: plans in 3 to 5 years, iron and steel, coal production capacity were reduced by 140 million tons and 800 million tons, so that related industries to restore healthier fundamentals.
In other words, the steel production capacity target from the original set of 1-1.5 billion tons to 140 million tons; while the coal industry, to the total capacity from a year ago, planning a billion tons reduced to 800 million tons.
The article also says half the provinces have hit their steel cut targets in the current 5-year plan.
