Full coverage: 8th China-U.S. S&ED & 7th CPE

Finance Minister Lou Jiwei said at the annual China-US Strategic and Economic Dialogue in Beijing that China will continue to reduce its industrial overcapacity.

"China is focusing on the problem of industrial overcapacity. In our work of de-stocking and reducing overcapacity, overcapacity reduction occupies the largest part. We reduced 90 million tons of excess capacity in the steel sector last year, and we'll continue to cut capacity," said Lou Jiwei finance minisiter, China.

Lou said China's industrial overcapacity issue resulted from its stimulus program implemented during the global financial crisis. That was when China contributed to about 50 percent of the world's economic growth. Lou added that because more than half of China's steel companies are privately owned, the government can only use market-based levers to cut capacity. Lou said the weak global economic recovery is largely due to structural factors such as lower output and lagged structural reforms. He said China and the US should adopt necessary fiscal and monetary policies to boost growth.