Economy

Further elimination of outdated capacity to create strains

(Xinhua)
Updated: 2011-06-23 09:29

BEIJING -- The task to eliminate more outdated production capacity will stimulate the economic transformation, but the restructuring won't come without pain, said an official with China's industry supervisor.

As much outdated capacity had already been disposed, further elimination would result in a squeeze on some sectors and impact on employment, said Zhu Hongren, chief engineer of the Ministry of Industry and Information Technology (MIIT) in an interview with Wednesday's People's Daily.

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Zhu made the remarks when explaining why the elimination tasks in 18 sectors this year seem more severe than previous years.

Over the past two years, more outdated production capacity had been eliminated because of higher indexes on environmental protection and energy efficiency, Zhu said.

Zhu said the elimination task should ideally be market orientated but the market was not yet mature enough, thus making government action necessary.

The elimination standards are the same across the country, but in practice developed regions are encouraged to implement stricter standards, while the less-developed areas may enjoy some degree of leniency, Zhu said.