China is seeking to consolidate several industries over the next 5 years in an effort to increase industrial concentration and reduce overcapacity. According to Su Bo, Vice Minister of the industry and information technology, priority will be given to the automobile, electrolytic aluminum, equipment manufacturing, IT, cement, steel, rare earth mining, and medical industries.
This announcement comes as China has stepped up its efforts to consolidate its heavily fragmented industries over the past few years. Despite the effort, the process has been slow due to unwillingness by local governments to allow such mergers, on the fear of lost tax revenue.
Su went on to say that consolidation is important for the nation’s industrial economy to continue to grow and for the transformation of its economic structure. Allowing these mergers will create larger corporations and drive their economy the government believes.