Reuters quoted the Ministry of Industry and Information Technology said China plans to step up consolidation of its steel sector this year by closing small mills and improving production standards.
In a new policy document, the ministry reiterated China pledge to eliminate mills that produced less than 1 million tonnes of crude steel last year, while manufacturers of higher end steel will have to produce more than 300,000 tonnes a year to stay in business.
Mr Li Yizhong China industry minister told a meeting in Dalian that steel enterprises would be held to tougher environmental and resource consumption standards and would also is forced to control overcapacity and shut down obsolete facilities.
According to a note issued by the ministry regulations on financing and land use will also be tweaked in order to encourage further consolidation in the sector and mills will also be encouraged to travel wider in their search for takeover targets.
Mr Li said the ministry would publish a list of enterprises that comply with new regulations in order to provide an important basis for government departments and financial institutions as they push industry restructuring forward.
The ministry said last month that China would put 60% of its total steel capacity in the hands of its 10 biggest steel mills by 2015 up from 44% at the end of last year.
However, China long standing plans to rein in its fragmented steel sector have been hindered by issues such as jurisdiction and the allocation of tax revenues.