'No more land' for firms with surplus capacity

In another sign of the government's resolve to tackle the problem of excess industrial capacity, the Ministry of Land and Resources will reject applications for land acquisition by companies in sectors with low capacity utilization ratios.

Those industries are steel, cement, electrolytic aluminum, plate glass and shipping.

"The ministry will clear the land used by projects involved in industries with excess capacity and launch a long-term, efficient system to prevent illegal land use by related companies," Minister of Land and Resources Jiang Daming was quoted as saying by the China Securities Journal.

A steel pipe plant in Mengcun, Hebei province. The government has launched policies that aim to curb overcapacity in the sector.[Photo/China Daily]

The capacity utilization of the shipping industry in the first three quarters was about 55 percent, 20 percentage points lower than in 2012.

As the burden of excess capacity intensifies, all central government departments with responsibility for the issue have announced measures to bring the situation under control.

On Oct 6, the State Council - China's cabinet - released guidelines on addressing the problem. The cabinet said that it was "essential" to prevent the further expansion of capacity by companies in troubled industries.

Another document was issued jointly by 10 departments, including the National Development and Reform Commission, the Ministry of Industry and Information Technology and the Ministry of Supervision.

That document said that the government is urging companies to avoid repetitive construction of excess capacity.

A conference call was held by the NDRC and the MIIT on Nov 4 to follow up on guidelines from the central government on tightened restrictions for companies trying to launch new projects.