China to Shut Factories Ahead of Olympics-sources

Hebei accounts for about 20 percent of China's steel production capacity.

 Authorities in Tangshan, an industrial city in Hebei province north of Beijing, have ordered 267 firms to shut down operations by July 8 to improve air quality ahead of the Olympics, government and industry sources said on Friday.

The firms include 66 steelmakers, as well as coke plants, cement firms and small power generators, a government official in Tangshan said.

The companies would have to undergo strict environmental protection checks before they could resume production at an unspecified date, the sources said.

The firms ordered to halt production were small ones, and their impact on Hebei's steel industry, which accounts for about 20 percent of steel production capacity in China, would not be significant, analysts said.

"It is hard to estimate how much steel production capacity would be shut down because most of the firms are very small ones," said Hu Yanping, a steel sector analyst with industry portal Umetal.com.

Beijing, one of the most polluted cities in the world, has spent 140 billion yuan ($20.43 billion) to combat chronic pollution as it prepares for the summer Olympics, which open on Aug. 8.

Pollution is a major concern for many athletes, and the International Olympic Committee has said it may reschedule some endurance events to remove health risks.

From July 1, vehicles that fail to meet emissions standards have been banned from entering downtown Beijing. And from July 20, Beijing will launch a traffic control system to take half of the city's 3 million cars off the road, using an odd-even licence plate system.

On Tuesday, China closed several small corn starch makers located in cities hosting events for the Games to fight pollution. [ID:nPEK300042]

The Beijing municipal government issued rules in April ordering industrial firms such as Shougang Group, one of China's major steel producers, to reduce or stop production from July 20.

But some firms on the list have already stopped production.

Qinchang Glass, a firm in Beijing's suburbs, has closed its plant, a company official said.

"We will not resume production until the Olympics are over," said a company official who declined to be identified. ($1=6.851 yuan)