China's Ministry of Industry and Information Technology (MIIT) announced in August it will soon roll out plans to stabilize growth in 10 key industries, including steel, nonferrous metals, petrochemicals and building materials. The measures will focus on "structural adjustment, supply optimization and outdated capacity phase-out," turning the July 30 Politburo directive on capacity governance into concrete action. The rollout signals a shift from broad policy guidance to targeted enforcement.
Policy Snapshot
Focus: The new plans are expected to prioritize structural upgrades - eliminating inefficient capacity and promoting advanced technologies. This marks a departure from late-2023 initiatives, which emphasized production stability and demand recovery. (GL Consulting will provide further analysis once the plans are released.)
Coverage: The 10 industries include both traditional heavy sectors and emerging manufacturing: steel, nonferrous metals, petrochemicals, chemicals, building materials, machinery, autos, power equipment, light industry and electronics.
Policy Context
The MIIT initiative builds on the July Politburo meeting, which outlined China's economic priorities for the second half of 2025:
- Growth priorities: Policymakers signaled satisfaction with current momentum, suggesting no large-scale stimulus in Q3. Efforts will instead focus on implementing existing policies, advancing capacity governance and boosting domestic demand.
- Refined "anti-involution" stance: Compared with the July Central Financial Work Conference, the Politburo dropped references to "low prices" and "backward capacity." The shift highlights support for healthy market competition, favoring innovation and efficient capacity over cutthroat price wars.
- Wider capacity governance: Oversight will extend beyond outdated capacity to include inefficient duplication and disorderly competition in key sectors, such as low-altitude economy and new energy, aimed at preventing premature overcrowding in high-growth industries.
- 15th Five-Year Plan ahead: The 20th Fourth Plenum in October will draft the 2026–2030 national economic development plan, expected to focus on technological innovation and "Dual Carbon" goals.
Outlook
Industry leaders with technology advantages: Structural reforms and capacity cuts are likely to accelerate market share gains for environmentally compliant, energy-efficient and innovation-driven companies.
Green tech and digital service providers: Industrial upgrades will spur demand for decarbonization solutions and digitalized production management.
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Our full report offers a detailed analysis of the July 2025 Politburo meeting, including:
- Key policy shifts for H2 2025 compared with April guidance
- Adjustments in the "anti-involution" framework and implications for petrochemicals
- Expansion of domestic demand and its impact on energy and chemicals
- Early signals for the 15th Five-Year Plan and areas of focus for the sector
The above content is the major conclusions and highlights extracted from China (Energy Transition) Policy Perspective. To get detailed full text, send an email to glconsulting@mysteel.com.
