Full coverage: 2016 Central Economic Work Conference

Officials say China has successfully completed its targets for overcapacity reduction in the steel and coal sectors this year but the problem will continue to be a major concern for the government in 2017.

National Development and Reform Commission Director Xu Shaoshi says next year won't be an easy one in the fight against overcapacity.

"We should take overcapacity reduction seriously. New industrial capacity should be restricted. Obsolete facility should be outdated. Violation of laws and regulations shall be punished," he said.

"We will ask firm to inspect themselves and each other and we will inspect them in a random way. We will unveil the progress and can not allow any cheating in this."

The NDRC will play a leading in coordinating overcapacity reduction. Xu said China will continue to implement supply-side reform in 2017 and deleverage firms to protect financial stability.

The government will streamline procedures and reduce taxes to help firms cut costs. Official data shows China has so far been ahead of its targets set for 2016 in reducing overcapacity in the coal and steel sectors.