BEIJING - China will regulate dormant firms to ensure they either re-start operation or file for liquidation, according to an official statement released Monday.

Dormant companies that have failed to submit annual operation reports or tax declarations for at least two consecutive years must do so or they will have their business licenses revoked, according to a statement jointly released by the State Administration for Industry & Commerce and the State Administration of Taxation.

The move will force non-performing "zombie enterprises," which waste resources, to shut down as they distort the general economic picture, the statement said.

The two government agencies will warn dormant firms before taking any measures.

The reduction of overcapacity in sectors such as steel and coal is high on China's reform agenda this year and plans have been announced to shut down non-performing plants and reemploy laid-off workers.