Pékin, China: China announced plans to cut steel production by as much as 150 million tonnes over the next five years, state media reported Thursday, as the country stares down industrial overcapacity that has weighed on its growth.

The State Council, the country’s cabinet, said it would close outdated plants and refuse to license new steel projects, the official Xinhua news service said.

Crude steel production declined 2.3 percent year-on-year to 803.8 million tonnes in 2015, the National Bureau of Statistics said last month. Xinhua news agency described it as the first drop since 1981.

China accounts for half the world’s crude steel production, according to data from the World Steel Association.

But the sector has been plagued by overcapacity in both China and the rest of the world for years, and global prices have plummeted in the face of oversupply.

Experts say China is sitting on an overproduction of 340 million tonnes.

The current production capacity is 1.2 billion tonnes, but the country only produced 804 million tonnes last year, Xinhua said.

European producers accuse Chinese firms of selling below the cost of production, and French economy minister Emmanuel Macron has warned that Europe would not accept the “Chinese dumping”.

Steel producers have also been hit by concerns over China’s slowing growth, which reached 6.9 percent in 2015, its slowest for 25 years.

Beijing has banned new projects in a variety of other industries in an effort to correct the problem, including cement, electrolytic aluminium, flat glass and shipbuilding.

Many of China’s giant state-owned enterprises are unviable and Premier Li Keqiang has called for a “cutback on overcapacity in traditional industries as well as a large number of zombie enterprises”.