BEIJING — The State Council on July 27 called for all-out efforts to meet overcapacity reduction targets in the steel and coal industries.

The market mechanism should be used to advance the capacity cut, which is a major task of the country’s supply-side structural reform drive, according to a statement released after a State Council executive meeting presided over by Premier Li Keqiang.

China aims to pare steel production capacity by 45 million tons and shave off coal capacity by over 250 million tons in 2016.

Companies with excessive capacity should be offered support when carrying out restructuring, and those producing substandard products or failing to meet environmental and energy-saving requirements should be shut down, according to the statement on July 27.

Differential water and electricity prices and credit policies should be rolled out to force firms to address outdated capacity.

China is the world’s largest producer and consumer of steel and coal. The two industries have long been plagued by overcapacity and felt the pinch even more in the past two years as the economy cooled and demand has fallen.

The State Council also called for faster implementation of major projects and more involvement of private investment to stabilize growth.

Banks should lend more to small and micro businesses to create more jobs and cannot arbitrarily withdraw or delay their loans, it said.

In addition, it also noted that the tax burden on financial industries should not be increased after an expansion of a reform to replace business tax with value-added tax.