According to a statement issued jointly on October 19 by 10 Chinese government ministries, including the National Development and Reform Commission (NDRC), the Ministry of Finance, the land ministry and the banking regulator, China is to withhold approval for any project for capacity expansion in six industries, including steel, cement and wind power equipment.
The NDRC gave approval for the Zhanjiang project of Baosteel Group and the Fangchenggang project of Wuhan Iron and Steel Corporation (WISCO) in early 2008, each with a designed annual production capacity of 10 million mt. Now, under the new regulatory policy of industrial restructuring, these two projects should be suspended.
However, despite the statement from the government ministries, Guangdong provincial authorities are to continue to carry forward the Zhanjiang steel project, for which infrastructures and relevant facilities are still under construction, and which is planned to be completed within the current year at an investment cost of RMB 12.48 billion. Local authorities still believe that the Zhanjiang project will obtain official approval, because Zhanjiang still retains all its advantages and the sheets to be produced by the Zhanjiang steel base will meet future industry requirements.
Meanwhile, according to the October 19 statement from the government ministries, it is also urged that no bank loans should be issued for projects that are not in conformity with the government's plans for restructuring and reinvigorating domestic industries.