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China to tackle industrial overcapacity

(Xinhua) Updated: 2015-12-22 10:57

BEIJING - China will formulate policy to resolve overcapacity as the supply glut in some industries has presented a major challenge to growth, according to a statement issued Monday after an annual economic conference.

China will create conditions for execution of bankruptcy procedures based on market rules, and speed up trials of bankruptcy liquidation cases, said the statement after the four-day Central Economic Work Conference.

A string of policies concerning fiscal and tax support, the handling of non-performing assets and caring for those out of work should be put in place, the statement said, adding businesses should seek more mergers and acquisitions to solve the problem and the capital market needs to facilitate the process.

In China, some industrial sectors have been struggling with weak demand and falling prices while suffering from outdated production ability, pushing their profitability down to dangerously low levels.

Monday's measures will allow market to play a bigger role in allocating resources and push under-performed businesses to exit the market.

Meanwhile, China's will strictly control the added capacity to avoid a new round of gluts, according to the meeting.

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