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China's Xi warns against overcapacity on visit to 2022 Winter Olympic venue

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Chinese President Xi Jinping has urged the northern province of Hebei to quicken efforts to reduce overcapacity and said shuttered "zombie" factories and firms should remain closed.

[SHANGHAI] Chinese President Xi Jinping has urged the northern province of Hebei to quicken efforts to reduce overcapacity and said shuttered "zombie" factories and firms should remain closed.

He made the comments during a trip to Hebei's Zhangjiakou city, which will co-host the 2022 Winter Olympics with Beijing, according to a statement posted on the Central Commission for Discipline Inspection's website late on Tuesday.

China has been pushing to cut overcapacity in industries but a jump in steel prices has encouraged many producers to ramp up production, potentially exacerbating a global steel glut.

Hebei produces around a quarter of China's steel, and according to official rankings is home to some of the country's smoggiest cities.

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Mr Xi said the illegal construction of new projects and the resurgence of backward production capacity should not be permitted, and efforts should be stepped up to develop emerging industries such as dairy production.

"Zombie enterprises that should be retired must be retired, and not be allowed to engage in fraudulent behaviour. Excess capacity that has been resolved must not be allowed to resurge,"the statement quoted him as saying.

REUTERS

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