China is planning to cut its coal production to contain environmental pollution in the country. It is also looking to weed out 'zombie' companies operating in the main polluting industries.

China is looking to curtail coal production by 500 million tons by 2020. The country is the largest consumer of energy in the world.

Like Us on Facebook

According to the Chairman of the National Development and Reform Commission Xu Shaoshi, China's coal output is likely to fall by 280 million tons in 2016, which is nearly 7.5 percent of its output in 2015. According to an estimate by BP Plc, China produced 3.75 billion tons of coal in 2015.

China will also cut its steel production capacity by 45 million tons in 2016. This will result in the relocation of 180,000 workers in the steel industry. "The most urgent task is reducing excess capacity. I'm very confident that we can achieve the targets," Xu stated.

China is struggling with excess production in various sectors including steel and coal. The country has allocated a total of 100 billion yuan ($15 billion) to help its coal and steel industry to transition. Up to 20 percent of these funds will be used for rewarding high achievers. The rest will be used for helping local authorities and state-run companies to fund retrenchments in the years 2016 and 2017. According to state estimates, 1.8 million people are likely to be laid off from these two sectors.

Xu reiterated that the government will pursue supply reforms as well as plans to boost aggregate demand to ensure a desired economic growth rate.

Tagscoal, steel, National Development and Reform Commission