While many nations are straining every sinew to give industry a leg-up, China is doing the opposite. Having satisfied itself that economic recovery has been seeded, if not yet flourishing, the State Council is turning its attention to slack in the system. This week it asked authorities to “resolutely” curb “over-capacity and redundant construction.”

As ever, planners have a range of tools at their disposal. At the blunt end are forced mergers: messy, but often effective. At the other are restrictions on licences, lending and the supply of land. Softer measures like these are likely to dominate in newly bloated areas such as wind power and silicon.

But it is in the heavy sectors of steel and cement, dominated by state-owned enterprises, that Beijing faces a bigger challenge. China, comfortably the world's biggest producer of both, is also the biggest consumer; stripping out too much capacity – as it did in power generation after the Asian crisis a decade ago – risks a scramble once demand recovers.

Capacity surely needs to come out: expected domestic steel consumption this year of about 470m tonnes compares to production of more than 600m. But in past purges, the planning commission has struggled to impose its will, thanks to well-connected factory bosses and militant workers. This time, the campaign is complicated by the recent explosion of credit, which has kept many marginal suppliers alive. Investment in the cement industry – where less than 70 per cent of capacity was being used last year – soared by two-thirds in the first half.

Still, seeing Beijing attending to its half-empty factories should give other governments pause. Since March 2002, when China's current data series began, it has averaged 84 per cent utilisation: better than the eurozone's 81 and the US's 78, both of which had latest readings at least 10 percentage points down on China's. Their task is just as urgent.