Govt orders 2,087 firms to shut obsolete production facilities-Texglobe

Govt orders 2,087 firms to shut obsolete production facilities

Updated: 2010-8-11 Source: Texglobe

As an effort towards improving the energy efficiency in the country, China’s Ministry of Industry and Information Technology has notified more than 2,000 firms to clean up or shut down obsolete production facilities by September end.

As per a senior official from the Ministry, old capacities consume huge amounts of power, pollute the environment and are hazardous with respect to safety. He further added that, such facilities reflect rudimentary and quantitative mode of China’s economic growth. More over, they are also a reason for inferior quality, inefficiency and weak competitiveness of the country’s economic development.

Any firm that fails to follow government’s directives will have to do away with their waste disposal licenses and they will also not receive government’s approval for new projects and bank loans.

Although, in 2005, Chinese government had vowed to improve the energy efficiency by 20 percent by 2010 end, it is still struggling to meet its target. After reducing the power intensity by 14.4 percent in 2009, it seems like the intensity has risen by 0.9 percent during the first half of 2010, as China’s quench for energy resources continues to rise.

With the new interference by the government, it seems like government is headstrong towards achieving its target by year end.

The 2,087 firms under threat of being shut down, fall under the 18 industries namely textile printing and dyeing, leather, chemical fibre, ethanol and the like. Most of the firms included in the list too are small to medium-sized private firms, informed the ministry.