去產能 (qu channeng): Cutting industrial overcapacity

The Central Economic Work Conference, which concluded on Monday, included cutting industrial overcapacity as one of the top five tasks for reform of China's economic structure.

With the ever-increasing pressure from the economic downturn, excessive industrial capacity seriously impedes China's economic development, especially in high polluting and high energy-consuming industries such as iron and steel and the coal industries.

There is a consensus that cutting excessive industrial capacity is necessary, and that this should be carried out in an active but prudent way.

First, outdated industrial capacity should be gradually eliminated and "zombie enterprises" should be closed down. Second, traditional industries should be further improved and upgraded through modern technology and management, in order to lift China's industries and products to the middle and high end. Third, the Internet Plus and Created in China national strategies should be strictly implemented to cultivate high-efficiency, low energy-consumption and low pollution emerging industries.

The authorities should support and cultivate new industries, such as the mobile Internet, cultural creative industry, the Internet of Things and high-end manufacturing. Experts point out that a policy package is needed to promote the process in an all-round way.