China allocates 100Bn Yuan to cut industrial capacity

China will make 100 billion yuan about (15.3 billion US dollars) of subsidies to steel and coal companies cutting capacity, China's Ministry of Finance said Wednesday.

    The funds will mainly be used to resettle laid-off workers, the statement said. Mergers, acquisitions, debt restructuring and bankruptcy should guide the exit of weak steel and coal companies that cannot make a profit, according to China's (Xinhua) News Agency. 

    China should also take "a combination of measures" to resolve overcapacity, including tax, land, fiscal and financial reform, according to the statement. In the past three years, China has eliminated more than 90 million tonnes of steel capacity and over 200 million tonnes of coal capacity.