Opinions of the State Council on Resolving Overcapacity in the Iron and Steel Industry to Gain Profits and Development
Opinions of the State Council on Resolving Overcapacity in the Iron and Steel Industry to Gain Profits and Development
Opinions of the State Council on Resolving Overcapacity in the Iron and Steel Industry to Gain Profits and Development
Guo Fa [2016] No.6
February 1, 2016
The people's governments of all provinces, autonomous regions and municipalities directly under the Central Government, all ministries and commissions of the State Council and all institutions directly under the State Council,
As an important basic raw material industry of the national economy, the iron and steel industry contributes a lot to the economic and social development of China with strong investment pulling, great ability to create jobs and high industrial association. In recent years, with the increasing pressure from economic downward and decreasing market demand for steels, the contradictions and issues accumulated in the process of rapid development of the iron and steel industry are exposed gradually, especially the overcapacity issue, and iron and steel enterprises experience greater difficulties in their production and operation and continuously expanding scale and amount of losses. In order to carry out the decisions and arrangement of the Party Central Committee and the State Council on promoting the structural reform and well fulfilling the task of capacity reduction, further resolve the overcapacity in the iron and steel industry and propel iron and steel enterprises to gain profits and development, the following opinions are hereby proposed:
I. General Requirements
(I) Guiding ideology. It is imperative to fully carry out the spirits of the 18th National Congress and the third, fourth and fifth plenary sessions of the 18th Central Committee of the Communist Party of China as well as the Central Economic Working Conference, firmly establish and implement the development ideas of innovation, coordination, green, opening-up and sharing in accordance with the overall layout of "Five in One" (economic, political, cultural, social and ecological civilization construction) and the strategic layout of "Four Comprehensive" (finish building a moderately prosperous society; deepen reform; advance the law-based governance of China; and strengthen Party self-discipline), pay attention to the promotion of the structural reform of the iron and steel supply, adhere to the reversed transmission of the pressure from the market, enterprises' subject status, organization by local authorities, central support, focus highlighting, accordance with the laws and regulations, adjust measures to local conditions, implement the policies by classification and address both the symptoms and root causes by comprehensive application of the market mechanism, economic means and rule of law, in order to positively and steadily resolve the overcapacity, establish a long-term mechanism of market-oriented capacity adjustment and promote the structural optimization, profit generation, upgrade, quality and efficiency improvement of the iron and steel industry.
(II) Basic principles.
Adhere to the reversed transmission of the pressure from the market and enterprises' subject status. Efforts shall be made to perfect the fair, open and transparent market rules, strengthen the market competition mechanism and reversed transmission of the pressure, increase the effective supply capacity, and guide the upgrade of consumption structure. We shall give play to the role of enterprises as subjects, and guarantee enterprises' right to make decisions on their own.
Adhere to the organization by local authorities and central support. It is imperative to strengthen the policy guidance, improve the systems and mechanisms, regulate government acts, and abolish inappropriate intervention in the market and local protection for enterprises conducted by the government. We shall give play to the initiatives of the central and local authorities and actively and orderly resolve the overcapacity to ensure social stability.
Adhere to focus highlighting and accordance with the laws and regulations. It is necessary to plan as a whole and promote the overcapacity resolution in all regions by means of making overall deployment and breakthroughs in major fields, and major provinces producing iron and steel and regions having a sound working base shall make a breakthrough first. Attention shall be paid to strengthen the consciousness of the rule of law, resolve the overcapacity according to the laws and regulations, effectively protect the legitimate rights and interests of enterprises and employees, well implement various employment and social security policies, and properly dispose of enterprises' assets and debts.
(III) Objectives. On the basis of elimination of backward iron and steel capacity in recent years, the crude steel capacity will reduce by another 100 million to 150 million tons within five years as of 2016; substantive progress will be made in terms of industrial merger and reorganization; the industrial structure will be optimized; the efficiency of resource utilization will improve; the rate of capacity utilization will tend to be reasonable; the product quality and high-end product supply capacity will significantly improve; economic benefits of enterprises will take a turn for the better, with market anticipation that is significantly positive.
II. Main Tasks
(IV) Strictly prohibit new capacity. Strictly subject to the Guiding Opinions of the State Council on Resolving the Conflict of Rampant Overcapacity (Guo Fa [2013] No.41), all regional authorities and departments shall not file any iron and steel projects with new capacity in any name or manner, while all the relevant departments and institutions shall not handle any relevant business such as examination and approval for land supply, energy assessment and environmental assessment or addition of credit support. Accountability shall be seriously investigated for any construction in violation of laws and regulations. The capacity that has exited from the market with the awards and subsidies granted and with the support of the relevant policies shall not be used for replacement.
(V) Resolve overcapacity.
1.
......
Guo Fa [2016] No.6
February 1, 2016
The people's governments of all provinces, autonomous regions and municipalities directly under the Central Government, all ministries and commissions of the State Council and all institutions directly under the State Council,
As an important basic raw material industry of the national economy, the iron and steel industry contributes a lot to the economic and social development of China with strong investment pulling, great ability to create jobs and high industrial association. In recent years, with the increasing pressure from economic downward and decreasing market demand for steels, the contradictions and issues accumulated in the process of rapid development of the iron and steel industry are exposed gradually, especially the overcapacity issue, and iron and steel enterprises experience greater difficulties in their production and operation and continuously expanding scale and amount of losses. In order to carry out the decisions and arrangement of the Party Central Committee and the State Council on promoting the structural reform and well fulfilling the task of capacity reduction, further resolve the overcapacity in the iron and steel industry and propel iron and steel enterprises to gain profits and development, the following opinions are hereby proposed:
I. General Requirements
(I) Guiding ideology. It is imperative to fully carry out the spirits of the 18th National Congress and the third, fourth and fifth plenary sessions of the 18th Central Committee of the Communist Party of China as well as the Central Economic Working Conference, firmly establish and implement the development ideas of innovation, coordination, green, opening-up and sharing in accordance with the overall layout of "Five in One" (economic, political, cultural, social and ecological civilization construction) and the strategic layout of "Four Comprehensive" (finish building a moderately prosperous society; deepen reform; advance the law-based governance of China; and strengthen Party self-discipline), pay attention to the promotion of the structural reform of the iron and steel supply, adhere to the reversed transmission of the pressure from the market, enterprises' subject status, organization by local authorities, central support, focus highlighting, accordance with the laws and regulations, adjust measures to local conditions, implement the policies by classification and address both the symptoms and root causes by comprehensive application of the market mechanism, economic means and rule of law, in order to positively and steadily resolve the overcapacity, establish a long-term mechanism of market-oriented capacity adjustment and promote the structural optimization, profit generation, upgrade, quality and efficiency improvement of the iron and steel industry.
(II) Basic principles.
Adhere to the reversed transmission of the pressure from the market and enterprises' subject status. Efforts shall be made to perfect the fair, open and transparent market rules, strengthen the market competition mechanism and reversed transmission of the pressure, increase the effective supply capacity, and guide the upgrade of consumption structure. We shall give play to the role of enterprises as subjects, and guarantee enterprises' right to make decisions on their own.
Adhere to the organization by local authorities and central support. It is imperative to strengthen the policy guidance, improve the systems and mechanisms, regulate government acts, and abolish inappropriate intervention in the market and local protection for enterprises conducted by the government. We shall give play to the initiatives of the central and local authorities and actively and orderly resolve the overcapacity to ensure social stability.
Adhere to focus highlighting and accordance with the laws and regulations. It is necessary to plan as a whole and promote the overcapacity resolution in all regions by means of making overall deployment and breakthroughs in major fields, and major provinces producing iron and steel and regions having a sound working base shall make a breakthrough first. Attention shall be paid to strengthen the consciousness of the rule of law, resolve the overcapacity according to the laws and regulations, effectively protect the legitimate rights and interests of enterprises and employees, well implement various employment and social security policies, and properly dispose of enterprises' assets and debts.
(III) Objectives. On the basis of elimination of backward iron and steel capacity in recent years, the crude steel capacity will reduce by another 100 million to 150 million tons within five years as of 2016; substantive progress will be made in terms of industrial merger and reorganization; the industrial structure will be optimized; the efficiency of resource utilization will improve; the rate of capacity utilization will tend to be reasonable; the product quality and high-end product supply capacity will significantly improve; economic benefits of enterprises will take a turn for the better, with market anticipation that is significantly positive.
II. Main Tasks
(IV) Strictly prohibit new capacity. Strictly subject to the Guiding Opinions of the State Council on Resolving the Conflict of Rampant Overcapacity (Guo Fa [2013] No.41), all regional authorities and departments shall not file any iron and steel projects with new capacity in any name or manner, while all the relevant departments and institutions shall not handle any relevant business such as examination and approval for land supply, energy assessment and environmental assessment or addition of credit support. Accountability shall be seriously investigated for any construction in violation of laws and regulations. The capacity that has exited from the market with the awards and subsidies granted and with the support of the relevant policies shall not be used for replacement.
(V) Resolve overcapacity.
1.
......