China overcapacity...

[yoganmahew]

ftalphaville.ft.com/blog/2010/04 … ity-issue/

FT Alphaville has wondered about the effects of lingering industrial overcapacity in key Chinese sectors before, especially in connection with commodity prices.

Now the Chinese government looks to be taking action.

A report in the China Daily on Tuesday said Beijing would force small steel mills with steel blast furnaces of less than 400 cubic meters to shut down production by the end of next year.

The government’s justification: fear that overcapacity would eventually threaten the country’s recovery, according to China Daily.

As the newspaper explained:

That’s hardly a boomy piece…