The Chinese government has ordered over 2,087 firms in high-polluting and energy-intensive industries to shut down outdated plant by the end of September. Companies that fail to do so risk having bank loans frozen, approvals for new projects and land purchases refused and their electricity cut off.

Companies effected produce steel, coal, cement, aluminium, glass and other materials and include plants owned by China’s biggest steel maker, Hebei Iron and Steel Group, and  the nation’s biggest aluminium maker, Aluminum Corp of China.

The reason for the dramatic action is that China’s average energy consumption per unit of gross domestic product rose marginally (by 0.09%) in the six months to June. This is the first year-on-year increase since 2006 but the Chinese Government is concenrned that it will make it more difficult for the nation to meet its goal of cutting energy consumption by 20 percent per unit of GDP between 2006 and 2010.