BEIJING China warned local officials over failures to curb industrial overcapacity after discovering two firms making steel illegally, according to a post on the country's cabinet website late on Friday.
Jiangsu Huada Steel Co Ltd was found to be making steel using outdated equipment and failing to meet quality standards, while Hebei Anfeng Steel Co Ltd had built new steel smelting projects without proper approvals.
The State Council statement said 138 people would be held accountable in connection with the incidents, naming provincial and local officials in Hebei and Jiangsu provinces who would be issued warnings for failing to carry out inspections or properly report violations.
Beijing is cracking down on excess capacity in heavy industry, with the country pledging to increase targets for capacity cuts in steel and coal in 2017, according to media reports earlier on Friday.
"Dealing with these two incidents gravely and with serious accountability and using this negative example as an educational warning embodies the Communist Party Central Committee and State Council's resolution in further promotion of supply side structural reform, resolution in reducing excess capacity and eliminating backwards production capacity," the statement said.
(Reporting by Jake Spring; editing by Susan Thomas)