In a dramatic moved aimed at improving energy efficiency, China’s industry ministry has told 2,000 companies to close outdated production facilities within two months.

 

The Ministry of Industry and Information Technology (MIIT) has ordered firms to shutter old plants by the end of September or lose access to bank loans, export credits and other government approvals. 

 

The goal of the factory closings is “to enhance the structure of production, heighten the standard of technical capability and international competitiveness and realize a transformation of industry from being big to being strong,” the New York Times quoted the ministry saying. 

 

The directive, posted on the ministry’s website on Sunday, covers 18 industries, including iron, steel, cement and copper and lead smelting.

 

It follows a decision last week by the country’s senior economic planning agency, the National Development and Reform Commission (NDRC) to stop provinces providing electricity at discounted prices to energy-intensive industries, the Times said.

 

In the six months to March 31 this year, China’s demand for energy created the largest ever ramp-up in human-generated greenhouse gases by a single country, the Times noted. 

 

Energy efficiency improved 14.4% in the first four years of the current five-year plan, but contracted 3.6% in the first quarter of this year, prompting Premier Wen Jiabao to convene a special meeting of government leaders in May to come up with plans to boost efficiency.

 

Energy efficiency was 0.09% worse in the first half of 2010 compared with the same period in 2009.