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China Axes Coal and Steel Curbs As Economy Slows

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Financial Times

China shifts focus from air quality to boosting growth as trade war bites.

Beijing will not renew significant cuts on steel production and coal use aimed at improving air quality this winter, as policymakers look to boost China’s economic performance in the midst of the country’s trade war with the US.

The curbs — a rare restriction imposed on industries where state enterprises are prevalent — were meant to target airborne pollution, which worsens during the winter as much of the country’s northern cities are heated with coal-fired power.

Last year, steel producers in four major production cities were forced to halve their output during the winter months while reducing their use of coking coal by nearly a third. Twenty-eight cities and regions were mandated to cut steel and aluminium output by roughly the same amount.

This winter, regulators are replacing hard caps on coal use and steel production with less stringent targets, weakening draft guidelines put out in August.

The easing may have been prompted by a public outcry. Winter curbs on coal, including on heaters used by many residents in smaller cities and villages, left millions freezing as local governments scrambled to provide gas heating.

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