Building facilities stand in the abandoned Qingquan Steel plant which closed in 2014 and became one of several so-called "zombie factories" in Tangshan, China. (Photo : Getty Images)
Chinese President Xi Jinping has called on Hebei Province to speed up the pace of overcapacity reduction this year, stressing the need for the country to develop emerging industries such as dairy production, which would lead to stronger economic growth.
China Daily reported that Xi made the call on Tuesday, Jan. 24, when he visited Zhangjiakou, the co-host city of the Beijing 2022 Winter Olympics.
Xi also asked the local government not to tolerate or allow "zombie" factories while enterprises that have been previously shut down must restart operations. He added that he will not allow cheating in the drive to reduce overcapacity.
In December, the State Council charged Zhang Jiehui, deputy governor of the province, with administrative punishment after it was found that he allowed steel mills that were previously shut down to start up again.
According to Niu Li, an economist at the State Information Center, Hebei Province is facing short-term challenges, although more opportunities are expected to come with the Olympics.
The province's economy relies mainly on so-called smokestack industries such as coal and steel, which are all facing challenges as the country aims to reduce the capacity further this year.
"For enterprises that may be lured by rising commodity prices, local officials need to adopt strict administrative measures to make sure that goals can be achieved on time," Niu said, adding that the province can drive growth by gainin a new momentum in its economy.
Meanwhile, during a visit to a local dairy company, Xi pledged to make the country's dairy industry "strong and excellent," by producing and promoting high-quality brands to overseas market and establishing industry chains that can compete internationally.
As both a major producer and consumer of dairy products, Xi also highlighted the importance of implementing food safety in the country. He urged all parties in the industry to maintain the highest standards and keep strict supervision to provide consumers with safe products. He added that trustworthy brands would eventually gain market share in both the local and overseas market.
The province's key industry now involves manufacturing of high-end equipment, surpassing the steel industry for the first time.
Enterprises engaged in high-end equipment manufacturing have earned 23 percent of profit, with annual sales that reached about 20 million yuan ($2.9 million).
