BEIJING — Chinese authorities released on Aug 21 a set of rules regulating government policies for the steel industry, prohibiting any support for illegal capacity in the sector.

In a notice jointly released by nine government agencies including the Ministry of Commerce and the Ministry of Finance, local authorities were told not to release any measures hampering the elimination of steel capacity that did not meet certain standards and the clean-up of “zombie” companies.

Regarding policies on encouraging innovation, research and technology progress in the industry, local regions should step up supervision and inspection to make sure policy funds are properly used.

The notice also stressed that the country’s steel trade policies should comply with WTO rules, banning the release of export subsidies and import substitution subsidies breaching such rules.

The notice was the latest sign of government determination to regulate overcapacity after efforts in cutting capacity in recent years helped support economic growth.

China plans to cut 30 million tonnes of ineffective steel capacity and 150 million tonnes of coal capacity in 2018, according to a government work report released earlier this year.