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China warns local leaders to cut industry bloat

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November 4, 2013 09:57 PM EST | AP


BEIJING (AP) — China's leaders have warned local officials to stop expanding industries such as steel and cement in which supply outstrips demand, in a sign previous orders to cut overcapacity were ignored.

A Cabinet statement Tuesday said planning officials held a video conference this week to tell local leaders to stop ignoring orders to reduce overcapacity.

Beijing has been trying since 2009 to cut back unneeded production capacity, which has triggered price-cutting wars that threaten the financial health of some industries. But lower-level leaders whose promotions depend on economic development have continued to support local industries.

The government newspaper China Daily quoted an official as saying on the video conference that local leaders who are caught ignoring orders to cut production capacity will be "heavily punished."