China Orders 2,000 Firms to Shut Outdated Plants

A total of 2,087 companies that produce steel, coal, cement, aluminum, glass and other materials have to close their old and obsolete facilities by the end of September.

The Chinese government has informed over 2,000 firms in high-polluting and energy-intensive industries that they will need to shut down outdated plants in its latest efforts to cut pollution and restructure the economy.

A total of 2,087 firms that produce steel, coal, cement, aluminum, glass and other materials have to close their old and obsolete facilities by the end of September, the Ministry of Industry and Information Technology said.

Companies that fail to do so risk having bank loans frozen, approvals for new projects and land dry up, and their electricity cut, the ministry said on August 8.

"Accelerating the elimination of backward production facilities is an important move to change the economic growth pattern, restructure the economy and to improve quality and efficiency of growth," it said.

China said last week its average energy consumption per unit of gross domestic product (GDP) had risen marginally in the six months to June -- the first year-on-year increase since 2006 -- despite pledges to improve efficiency.

Energy consumption per unit of GDP was up by 0.09% in the first half from a year earlier, making it more difficult for the nation to meet its goal of cutting energy consumption by 20% per unit of GDP between 2006 and 2010.

The outdated facilities due for closure include some owned by China's biggest steel maker by output, Hebei Iron and Steel Group, and China Aluminum Corp of China, the nation's biggest aluminum maker, according to the ministry.

Rapid industrialization over the last 30 years has left China, the world's third-largest economy, with some of the world's worst water and air pollution and has left widespread environmental damage.

The International Energy Agency recently announced that China had surpassed the United States last year to become the world's top energy consumer -- a dubious distinction rejected by Beijing, which called the data "unreliable."

Copyright Agence France-Presse, 2010

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