The Ministry of Finance of the PRC will finance up to 70 percent of the amount of M&A transactions in metallurgy

The PRC government considered the current volume of the country's steel industry to be excessive, and a decision was made to cut existing production. The program implements a policy of mergers and acquisitions of companies with the aim of their consolidation. It was also decided to pursue a tougher policy in the field of lending to the metallurgical industry. The state is ready to undertake up to 70 percent of the costs of the corporate enlargement program, and at the same time it will exercise strict control over the activities of the banking sector in order to prevent lending to illegal metallurgical enterprises, in order to avoid the creation of new production facilities.

Initially, the Chinese government decided to reduce the volume of the metallurgical industry by 100-150 million tons by 2020. But back in February, an official statement was made to cut production by 45 million tons, and by November the State Council announced the early implementation of the government decree in 2016. China produces and consumes more steel and coal than any other country, and the reduction in the volume of this industry, in the opinion of the Chinese leadership, should provide the country's economy with stable growth.