At the executive meeting on Jan 22, the State Council - presided over by Premier Li Keqiang - decided to advance a new type of urbanization to boost domestic demand and to resolve the overcapacity problem in the coal and steel industries.

Progression of the new type of urbanization can help expand effective investment and consumption, and contribute to the balanced development of urban and rural areas. The government will do the following:

First, lift household registration restrictions imposed on migrant rural population and explore voluntary systems for them to relinquish land contract rights, the right of land use for residence, and the right for distribution of collective income.

Second, speed up transforming urban shantytowns and dilapidated buildings, attract social capital to participate in construction of underground pipelines, and adopt the Internet Plus model to build smart cities.

Third, expand the scope of trials for new urbanization practices and develop medium to small sized cities.

Fourth, improve land and housing policies while encouraging local governments to set up urbanization development funds with social and financial capital.

The meeting also decided to tackle overcapacities in steel and coal industries with legal and market approaches.

First, adopt more rigorous standards on safety, quality, and energy consumption to eliminate outdated capacity. Enterprises can slash capacity through mergers and acquisitions, transformation or relocation.

China will cut another 100-150 million tons of crude steel production based on the elimination of a 90-million-ton capacity over the years.

Second, strictly control new industrial capacity. In principle, China will stop approving new coal mines, and will adopt technological innovations for new industrial capacity.

Thirdly, improve supporting policies such as establishing special funds for industrial enterprises to adjust structures; supporting social capital to participate in corporate acquisition and reorganization, and taking various measures to resettle the possible laid-off workers.