Chinese Premier Li Keqiang reiterated Monday the need for structural reforms in the steel and coal supply, even as he noted signs of returning demand.
"Even though some industries are seeing an improvement in demand, restructuring efforts cannot be relaxed," Li told provincial governors, according to a report on the State Council's website.
"The transformation and upgrading of traditional growth drivers and the elimination of obsolete capacity in steel and coal must be hastened, as arrangements are made to resettle and ensure basic living and work for those affected in the process," he said.
Economic indicators on investment, consumption and productivity had shown improvement "beyond expectations" since the start of the year, Li said, adding that market confidence had strengthened, especially as new growth drivers offset weakness in traditional industries.
The recent rebound in steel prices exerted some pressure on the state's efforts to cut capacity, Wang Liqun, vice chairman of the China Iron & Steel Association, said last Friday. In the light of the central government's stance on the industry, companies should "throw away their delusions" of wanting to survive and hoping that their peers go down, especially those that are the least efficient producers, he added.
