China Hebei Province To Cut Steel Capacity of 67.26 Million Tonnes By 2017

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China’s largest steel base, Hebei province, will cut 67.26 million metric tons of capacity by 2017 without putting too much emphasis on local growth in gross domestic product in order to create a sustainable development of the industry and improve air quality.

Heavy industries such as iron and steel, cement and glass production have been pillars of Hebei’s economy for years. However, the heavy pollution, especially lingering smog, means the province will face huge costs to improve the environment.

According to a plan released by the Hebei Development and Reform Commission, the province will close 21.5 million metric tons of steel capacity annually by 2017. Hebei has the biggest steel output in the country, amounting to 180 million metric tons of crude steel in 2012, a quarter of the total output in China. The reduction in overcapacity will affect Hebei government’s tax revenue of 15.92 billion yuan ($2.62 billion) directly.