China bans capacity expansion in cement, glass sectors

Staff members work in a glass production factory in Nantong, East China's Jiangsu province, in October 2009. [Photo/IC]

Chinese authorities have called for efforts in preventing new capacities in cement and flat glass industries as the government remains firm in its drive to cut capacity.

On the back of the government's efforts to cut capacity, the two sectors have seen improved profitability, which prompted certain regions to expand their capacity, according to a notice released by the Ministry of Industry and Information Technology and the National Development and Reform Commission.

In light of the emerging trends, the notice strictly banned any approvals of new construction projects as the oversupplied situation in the two industries remained "grim."

For years, a wide range of industries in China, including steel, cement, aluminum, flat glass, and coal, have been running at overcapacity.

Related businesses in land supplies, environmental approvals as well as credit support should also be halted, while projects of capacity replacement should strictly follow local plans, according to the notice.

The move is the latest sign of the government's determination to regulate overcapacity after its successful efforts in cutting capacity in recent years helped support economic growth.