China to Cut Petchem Capacity

China will make efforts to cut overcapacity in its petrochemical industry by shutting down outdated plants and consolidating production in the sector, China's cabinet said on Wednesday.

The government will build seven mega-petrochemical complexes in coastal areas in eastern China to consolidate the industry, the cabinet said in a document released on its website.

The projects include a $15 billion energy installation in the port city Ningbo and a refining hub in Hebei province.

The cabinet's plan also calls for the shutdown of old, inefficient plants, partly by encouraging mergers and acquisitions in the industry and allowing the participation of foreign companies in such deals, the document said.

The government will also support companies that want to build fertilizer and lubricant plants in overseas countries, the cabinet said.

China is the world's largest consumer of energy, iron ore, coal, steel and other commodities, but suffers from massive industrial overcapacity that it is endeavouring to correct.

Reporting by Meng Meng and Aizhu Chen