On February 9, the Ministry of Industry and Information Technology (MIIT) publicly announced the first batch of steel enterprises proposed for revocation of their regulatory announcement status. Hebei Iron and Steel Group Longhai Iron and Steel Co., Ltd., Qinhuangdao Anfeng Iron and Steel Co., Ltd., and 35 other enterprises are proposed to be included in the first batch of enterprises whose steel regulatory announcement status is to be revoked, due to circumstances such as the existence of illegal and non-compliant conduct and having been listed in the 2016 capacity reduction tasks with overall withdrawal or suspension of production for more than one year. This batch of names was determined in accordance with the requirements of standardized management of the steel industry, through enterprise self-inspection, local preliminary review, and expert verification.

“The regulatory conditions for the steel industry are not high; they are not advanced standards, but the basic conditions that steel enterprises need to meet.” A relevant official of MIIT stated that standardized management of the steel industry is a means of ongoing and post-event supervision, not an approval process. Being included in the regulatory list does not mean an enterprise has entered a “safe box” and cannot serve as a protective talisman for an enterprise. The purpose of carrying out dynamic adjustment of steel regulation and realizing that regulated enterprises “can enter and exit” is to urge enterprises to better and continuously achieve standardized production and operation in accordance with laws, regulations, and policy standards on environmental protection, quality, energy consumption, safety, and technology.

MIIT's standardized management of the steel industry began in 2012. As of 2015, a total of three batches of 304 regulated enterprises had been announced, accounting for about 90% of the country's total crude steel capacity. To achieve dynamic management of steel regulated enterprises and strengthen ongoing and post-event supervision, in 2015 MIIT issued the “Regulatory Conditions for the Steel Industry (2015 Revision)” and the “Measures for the Management of Steel Industry Regulated Enterprises,” and in 2016 launched the dynamic adjustment of standardized management.

The regulatory conditions for the steel industry mainly set specific requirements in five aspects: product quality, processes and equipment, environmental protection, energy consumption and comprehensive resource utilization, and safety, occupational health, and social responsibility. According to the requirements of the “Regulatory Conditions for the Steel Industry” and the “Measures for the Management of Steel Industry Regulated Enterprises,” and in conjunction with the work of resolving overcapacity, the overall approach to the dynamic adjustment of steel regulated enterprises is to support the resolution of overcapacity, gradually reduce the number of steel enterprises, no longer include enterprises that cannot continue to meet the requirements in the announcement list, strictly screen newly applying enterprises, and achieve dynamic adjustment with “entry and exit.” The three types of lists formed through dynamic adjustment—the “List of Enterprises Whose Regulatory Announcement Is Revoked,” the “List of Enterprises Required to Rectify,” and the “List of Enterprises Meeting Regulatory Conditions”—will be promptly announced to the public.

During the regulatory dynamic adjustment period (that is, the period from the previous regulatory announcement to the end of the current regulatory adjustment), enterprises will have their regulatory announcement status revoked if they are in any of the following circumstances: first, illegal and non-compliant addition of capacity; second, discovery of equipment that the state has explicitly ordered to be eliminated and banned; third, being ordered to suspend business and close down or subjected to more severe penalties in various law enforcement and regulatory areas such as environmental protection, quality, safety, and energy consumption; fourth, having already withdrawn entirely as part of the 2016 capacity reduction tasks; fifth, having suspended production for more than one year. “Enterprises whose regulatory announcement status is revoked and that do not meet regulatory conditions do not mean that these enterprises can no longer engage in steel production and operation; it only means that these enterprises have committed illegal and non-compliant acts or cannot meet the most basic conditions for steel enterprise production and operation.” The aforementioned official stated that these enterprises should rectify according to the requirements of the regulatory conditions and standardize production and operation in strict accordance with relevant laws, regulations, and policy standards. Local authorities should include them as key targets of supervision, and law enforcement departments for environmental protection, quality, safety, and other areas should increase the intensity and frequency of law enforcement supervision over them. For enterprises that cannot meet the requirements after rectification, comprehensive legal, economic, and market means should be used to promote their exit or transformation and development. For enterprises that have rectified properly and can continuously maintain standardized production and operation, in principle, 12 months after the date of revocation of the announcement, they may reapply through procedures for compliance with the “Regulatory Conditions for the Steel Industry.” Enterprises that meet the regulatory conditions should, in accordance with the requirements of the regulatory conditions, exercise self-discipline, continuously improve, actively cooperate with relevant law enforcement departments by voluntarily accepting supervision and inspection, and continuously maintain standardized production and operation. Once it is found that they have circumstances not meeting the requirements of the regulatory conditions, their regulatory announcement will be revoked.

It is understood that in the future, relevant enterprises ordered to rectify in law enforcement supervision areas such as environmental protection, quality, safety, and energy consumption will be included in the list of enterprises required to rectify. For enterprises included in the rectification list, if they fail to rectify properly within 6 months, or if circumstances requiring rectification arise again during the next regulatory dynamic adjustment period, their regulatory announcement will be directly revoked. To further strengthen ongoing and post-event supervision and promote continuous standardized operation of enterprises, MIIT will increase the frequency of dynamic adjustment for regulated enterprises. Once problematic enterprises subject to revocation or rectification are discovered, they will be promptly announced to the public.