Minister of Finance Lou Jiwei. Photo: CFP

The nation is facing up to the problem of industrial overcapacity, and it eliminated 90 million tons of excess capacity in the steel sector alone in 2015, Minister of Finance Lou Jiwei said on Monday.

Measures will be taken to support and guide domestic companies to reduce excess capacity, for example, financial support for the transition of workers in overcapacity industries to other jobs, Lou told a briefing conference during the ongoing 8th round of the US-China Strategic and Economic Dialogue (S&ED) and the 7th round of the US-China High-level Consultation on People-to-People Exchange.

But China is "no longer a planned economy," and it cannot set a quantitative target for its steel companies, more than half of which are privately owned, said Lou, noting that the reduction in industrial overcapacity is market-oriented.

According to media reports, China plans to set up a 100 billion yuan ($15 billion) fund to help the transition of coal and steel workers.

Industrial overcapacity in China is one of the hot topics at the 2-day S&ED, which began in Beijing on Monday.

The annual S&ED, established in 2006, has proved to be a useful mechanism for building and managing a constructive and durable relationship between China and the US.

A senior US Treasury official was quoted by Reuters as saying on Wednesday that the US Treasury will press China during the bilateral meetings to continue reducing excess industrial capacity.

Some business groups in the US have blamed cheap Chinese imports for the international steel crisis. The US Commerce Department recently imposed steep countervailing and anti-dumping duties on a wide range of steel products from China.

The capacity in China's steel and coal industry was accumulated after the global economic crisis in 2008, as China boosted investment in construction, not only lifting up the steel and coal industries but also its GDP, said Lou.

At the time, the world applauded the growth in China's steel and coal industries, but now it  criticizes the overcapacity in the same sectors, he said.

"Why didn't they complain when China was contributing to world growth?" he said.

According to the minister, China contributed more than 50 percent of global economic growth during the 2009-11 period.