China aims to hit its steel and coal capacity reduction targets for this year, as the country aims to sustain the momentum of the structural reforms it initiated last year.

To recall, the Chinese government cut its steel production by 45 million metric tons, while slashing its coal production by 250 metric tons, according to China Daily. 

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According to Xin Renzhou, deputy director of industrial policy for the Ministry of Industry and Information Technology, the Central Government's capacity reduction targets for 2017 are contained in the Government Work Report which will be unveiled very soon.

To be presented by Premier Li Keqiang on Sunday, the Government Work Report is expected to contain a review of the Xi administration's efforts to bring down the excess production capacity of two of the country's top industries.

Xin pointed out that Supply-side structural reforms in China, particularly its steel and coal reduction targets, will continue to be a major priority of the Chinese Government for the steel sector.

Such measures are expected to be extensively discussed during this year's National People's Congress and the Chinese People's Political Consultative Conference.

However, Xin admitted that achieving China's steel and coal capacity reduction targets remains a challenge.

But such obstacles must be overcome, he said, as China seeks to bring down its steel production by 150 million tons and coal production by 800 million tons by 2020.

Based on information from China's state-owned Assets Supervision and Administration Commission, the agency has set its steel and coal capacity production to 5.95 million tons and 24.73 million tons respectively this year.

The provincial governments of Hebei, Shandong and Shanxi provinces and the Inner Mongolia autonomous region have likewise announced their capacity reduction targets.

For instance, Hebei has pledged to slash its steel capacity by 31.86 million tons and coal capacity by 7.42 million tons, as well as shutter four "zombie" enterprises.

In the meantime, Yu Yong, chairman of Hesteel Group, the largest steel firm in Hebei, noted that "properly cutting capacity will make room for restructuring and upgrading of the steel sector," reported China.org.

To recall, the company had cut its iron and steel production capacity last year by 3.2 million tons.

The firm plans to further lower its production capacity by 4.4 million tons this year.

Tagschina, China steel, China coal, China Steel Coal Capacity Reduction Target