On the 31st, the Ministry of Industry and Information Technology published the "Implementation Measures for Capacity Replacement in Some Industries with Severe Overcapacity," stipulating that for project construction in industries with severe overcapacity such as steel, electrolytic aluminum, cement, and flat glass, capacity replacement plans must be formulated and equal or reduced replacement implemented. In environmentally sensitive areas such as Beijing-Tianjin-Hebei, the Yangtze River Delta, and the Pearl River Delta, reduced replacement shall be implemented.

According to the Measures, for new construction, reconstruction, and expansion projects in the four industries with severe overcapacity mentioned above, equal or reduced replacement shall be implemented. Equal replacement means that new, reconstructed, or expansion projects shall eliminate outdated or excess capacity in an amount equal to their own capacity; reduced replacement means that projects shall eliminate outdated or excess capacity in an amount greater than the capacity of the construction project.

The Measures point out that only outdated and excess capacity eliminated by enterprises listed in Ministry of Industry and Information Technology announcements for 2013 and later may be used for capacity replacement for new (reconstructed, expanded) projects, and may not be used repeatedly. In addition, outdated capacity that has exceeded the deadline set by the state for elimination may not be used for capacity replacement.

The Measures explicitly support cross-regional capacity replacement and guide effective domestic capacity to concentrate in advantageous enterprises and regions with greater comparative advantages. All localities are encouraged to actively explore government-guided, enterprise-voluntary, market-oriented trading of capacity replacement indicators. The Measures specify that the implementation period for equal or reduced capacity replacement is tentatively set until the end of 2017 and will be revised in due course according to industrial development conditions.