China allocates 100b yuan to cut industrial capacity

BEIJING - China will make 100 billion yuan ($15.3 billion) of subsidies to steel and coal companies cutting capacity, the Ministry of Finance said Wednesday.

The funds will mainly be used to resettle laid-off workers, the statement said.

Mergers, acquisitions, debt restructuring and bankruptcy should guide the exit of weak steel and coal companies that cannot make a profit.

China should also take "a combination of measures" to resolve overcapacity, including tax, land, fiscal and financial reform, according to the statement.

In the past three years, China has eliminated more than 90 million tonnes of steel capacity and over 200 million tons of coal capacity.