2016年CRI China Pledges to Cut Coal and Steel Overcapacity

 

As the world's largest coal producer and consumer, massive coal production has powered China's economic advance over the past few decades.

But shrinking domestic demand amid an economic slowdown has made much of this capacity redundant¹.

Wang Xianzheng, Chairman of the China's China Coal Industry Association, says China is facing its highest-ever coal inventories².

"Due to declining market demand, inventories keep rising. China now has more than 300-million tons of coal inventories. This has reached a historically high level. Meanwhile, the drop in coal prices has led to a significant amount of defaulted payments to coal companies, which has brought difficulties to their business."

Ninety percent of the companies in the coal industry are now suffering loses.

The same glut³ has also been felt in China's steel industry, especially in the past two years, as world steel demand contracted.

According to China Iron and Steel Association, China's crude steel production capacity is about 1.2 billion tons with output falling 2.3 percent last year.

Li Xinchuang, head of China Metallurgical Industry Planning and Research Institute, says that steel prices are much lower than that 20 years ago.

"The decline of consumption will lead to an oversupply⁴ and disordered competition in the market. The steel price has sunk to its lowest point in history, nearly 40 percent lower than the price index in 1994. Nearly half of the member companies of the China Iron and Steel Association now face losses. The total deficit⁵ hit 72-billion yuan in the first ten months of last year."

Li Xinchuang says if the situation continues to worsen, some companies face production halts or even closures, which will lead to huge financial losses as these firms default on loans.

To address the problem, Yang Weimin, vice⁶ director of the Office of the Central Leading Group on Finance and Economic Affairs, says these "zombie" companies, those which have ceased operations but have not formally gone bankrupt, must be shut down.

"If the "zombie" companies are not eradicated⁷, demand stimulation⁸ and investment expansion cannot play their proper role in boosting the economy. And high quality companies will be dragged down in the future. We need to firmly shut down those "zombie" companies to balance the demand and supply in the industry and inject confidence in the high quality companies."

To slash⁹ the overcapacity, no new steel projects have been given the go ahead since May of 2013.

The country will also shut down 500 million tons of coal capacity and consolidate¹⁰ another 500 million tons into the hands of fewer but more efficient mine operators in the next three to five years.

Resettlement of workers will be a top priority with coal and steel producers set to offer compensation to redundant workers and to pay their unpaid¹¹ wages.

Relevant authorities have pledged to provide training and employment services to help the unemployed¹² find work and make plans to pay unemployment benefits to those who may lose their jobs.

For CRI, I am Victor Ning.

1 redundant   

adj.多余的，过剩的；(食物)丰富的；被解雇的

参考例句：

• There are too many redundant words in this book.这本书里多余的词太多。
• Nearly all the redundant worker have been absorbed into other departments.几乎所有冗员，都已调往其他部门任职。

2 inventories   

n.总结( inventory的名词复数 )；细账；存货清单（或财产目录）的编制

参考例句：

• In other cases, such as inventories, inputs and outputs are both continuous. 在另一些情况下，比如存货，其投入和产出都是持续不断的。
• The store must clear its winter inventories by April 1st. 该店必须在4月1日前售清冬季存货。

3 glut   

n.存货过多，供过于求；v.狼吞虎咽

参考例句：

• The glut of coffee led to a sharp drop in prices.咖啡供过于求道致价格急剧下跌。
• There's a glut of agricultural products in Western Europe.西欧的农产品供过于求。

4 oversupply   

n.供应过量；v.过度供给

参考例句：

• The market softened because of oversupply.市场因供过于求而疲软。
• Overexpansion of tea fields has led to oversupply.茶园过度扩张，使得市场上逐渐供过于求。

5 deficit   

n.亏空，亏损；赤字，逆差

参考例句：

• The directors have reported a deficit of 2.5 million dollars.董事们报告赤字为250万美元。
• We have a great deficit this year.我们今年有很大亏损。

6 vice   

n.坏事；恶习；[pl.]台钳，老虎钳；adj.副的

参考例句：

• He guarded himself against vice.他避免染上坏习惯。
• They are sunk in the depth of vice.他们堕入了罪恶的深渊。

7 eradicated   

画着根的

参考例句：

• Polio has been virtually eradicated in Brazil. 在巴西脊髓灰质炎实际上已经根除。
• The disease has been eradicated from the world. 这种疾病已在全世界得到根除。

8 stimulation   

n.刺激，激励，鼓舞

参考例句：

• The playgroup provides plenty of stimulation for the children.幼儿游戏组给孩子很多启发。
• You don't get any intellectual stimulation in this job.你不能从这份工作中获得任何智力启发。

9 slash   

vi.大幅度削减；vt.猛砍，尖锐抨击，大幅减少；n.猛砍，斜线，长切口，衣衩

参考例句：

• The shop plans to slash fur prices after Spring Festival.该店计划在春节之后把皮货降价。
• Don't slash your horse in that cruel way.不要那样残忍地鞭打你的马。

10 consolidate   

v.使加固，使加强；(把...)联为一体，合并

参考例句：

• The two banks will consolidate in July next year. 这两家银行明年7月将合并。
• The government hoped to consolidate ten states to form three new ones.政府希望把十个州合并成三个新的州。

11 unpaid   

adj.未付款的，无报酬的

参考例句：

• Doctors work excessive unpaid overtime.医生过度加班却无报酬。
• He's doing a month's unpaid work experience with an engineering firm.他正在一家工程公司无偿工作一个月以获得工作经验。

12 unemployed   

adj.失业的，没有工作的；未动用的，闲置的

参考例句：

• There are now over four million unemployed workers in this country.这个国家现有四百万失业人员。
• The unemployed hunger for jobs.失业者渴望得到工作。