Transfer of Excess Capacity to Overseas Market a Win-Win Strategy

SHANGHAI, Oct. 29 (SMM) – 
 

China has been committed to tackling overcapacity issue for years, but little progress has been reported, with new capacities continuously reported from some sectors, including plat glass, aluminum, and cement sectors.

 

Experts believed that transferring excess capacity in China to foreign markets would be a good remedy to address China’s capacity surplus, Shanghai Metals Market (SMM) has learnt. These exports noted that excess capacity in domestic markets may be much needed in other countries. Investment by Chinese enterprises would be welcomed by Mexico, India, Iran, and many central Asian nations, and these countries hoped that China will help with their infrastructure construction, manufacturing, and export processing zone. 

 

The State Council issued the Guide for Addressing Severe Overcapacity October 15, with aluminum industry again targeted as one of the industries suffering severe capacity surplus. Liu Libin, Vice President of Henan Nonferrous Metals Industry Association, said that the average electricity price is 0.2-0.25 yuan/kwh in Xinjiang, and about 0.3 yuan/kwh after factoring in transmission, which is nearly 100% below the power cost in Henan province.

 

Although a 10% increase in power price is proposed, the measure will only help regulate enterprises whose power is supplied by the State Grid, while those using power generated by their own power plants – which make up the majority of aluminum enterprises – will be unaffected.

 

661 state-controlled enterprises in Sichuan will disclose their information concerning environmental protection on the website of local environmental protection offices since next year. Local environmental protection offices will oversee the implementation of self-monitoring, pollutant discharge, and information disclosure at these enterprises.