Economy

China to reward outdated capacity elimination

(Xinhua)
Updated: 2011-05-06 17:08

BEIJING - The Ministry of Finance (MOF) said on Friday that it will continue to allocate funds to reward companies in underdeveloped regions for eliminating outdated production capacity over the next five years.

The move is aimed at accelerating the country's industrial upgrade, improving the quality of economic growth and promoting energy savings and emission reductions, the ministry said.

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High-polluting and high-energy-consuming industries, including electricity, steel, coke and cement, will be rewarded for culling outdated capacity, according to a guideline jointly issued by the MOF, the Ministry of Industry and Information Technology and the National Energy Administration.

The companies themselves should shoulder most of the responsibilities of eliminating outdated capacity, while local governments must also try to help companies fulfill energy saving and emission reduction goals, the guideline said.

Local governments should also earmark funds to support shutting down backward production facilities. Central and local government funds must be used to help companies relocate employees, switch to other production modes and clear debts, not to balance the budgets of local governments, the guideline added.