Beijing's talk of steel curtailments hasn’t halted output boom

Aug 27, 2009 | 09:47 AM |

The Chinese central government has again said it is revved up to clamp down on overcapacity, but continues to send mixed signals as steel production runs at all-time highs.

The State Council, the senior policy-making body of China's government, said it wants to see more control over expansions in major sectors like steel, prompting stock markets across Asia to fall even though the government has trumpeted the need for consolidation in the fragmented steel sector for a long time, but with limited effect.

While there were more specifics this time—including a possible curb on capacity expansion and possibly stricter controls on land and lending for new mills—it doesn't really add anything to previous pronouncements and, in the midst of what Premier Wen Jiabao has himself called a fragile economic recovery, consolidation is difficult.....