Further evidence that China starts to follow the bubble neoliberal model, through a systematic, central planning. Official announcements contain IMF-type phrases like "structural reforms" concerning the economy, which shows a trend by the political elite to develop further correlation with the Western economic bloc.
The news are indicative of a probable intention by the central authority to lead the country towards a gradual deindustrialization, in order to meet the Western neoliberal model of the investment-bubble economy.
Chinese Premier Li Keqiang has reiterated the urgency and the government's resolve to cut excess capacity in steel and coal industries, as the country strives to restructure its economy.
The State Council didn't specify the deadline for such cut, but pointed out that China has cut its production capacity of crude steel by more than 90 million tonnes in recent years. China will reduce the production capacity of coal by “a relatively large margin,” according to the statement.
“Digesting overcapacity in steel and coal sectors is an important measure to promote the supply-side structural reforms,” the statement said, adding that the process will deliver the industries out of trouble and achieve upgrading. China's production of crude steel fell 2.3 percent to 804 million tonnes in 2015, the first time the industry reported negative growth in 34 years. Any newly-added capacity in crude steel and coal industries will be “strictly controlled,” the statement said.
The government should be fully aware of the importance and challenges in digesting excess capacity, the statement said, adding that the government will introduce necessary measures to help the laid-off workers cope with difficulties and find new employment.
More than a year ago, Chinese officials stated that “China is transforming from a major commodity exporter to a capital exporter, [...] The large going-out of Chinese capital means the country is able to participate in the restructuring of global industrial, supply and value chains, which are the keys to foster new competitive advantages, [...] The middle-income group will be the main force to stabilize domestic demand, he said. As the group is expanding, 600 million people will be middle-income by 2020. Total consumption is expected to be tripled by then compared with that in 2010.” [fa.ev/it-has-started-brand-new-market-in]
As hyper-automation seems to penetrate into almost every sector of the Chinese economy, it appears that China rushes to adjust the economy to the new conditions designed by the powerful economic elites.
Recall that, the IMF recently included the Chinese currency into the club of the world's leading currencies that shape the Western monetary monopoly. As mentioned “China needs to understand that its invitation to the hard currencies club, is an effort by the West to control its perspective towards a competitive monetary system, in which the country may have a leading role. It's what the bubble-economy elites fear most: the potential of a far more reliable alternative to the neoliberal monetary monopoly which will seriously threaten their global dominance.” [fa.ev/the-western-clowns-to-set-trap-on-china]
Already, China seems to suffer from the illness of the Western bubble-type economies and starts more and more frequently to return waves of instability to the global financial system.