In a bid to combat the over-capacity in steel and iron production, the northern province of Hebei, which produces a quarter of China’s steel, has pledged to cut down iron production by 10 million tonnes and steel by eight million tonnes.
This turnaround comes in the midst of worsening air pollution in the region, blamed primarily on the production of steel, cement and glass. The reliance on heavy industries such as Iron and Steel has also left Hebei vulnerable to the ongoing dip in domestic and foreign demand for capital goods.
The production cuts will likely ease the problem of over-capacity but affect Hebei’s economic growth in the short term.
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