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State enterprises profit in China's manufacturing crackdown

Capacity cuts, environmental rules force private plants to idle or close

Chinese national flags are flying near a steel factory in Wu'an, Hebei province.   © Reuters

BEIJING -- As China squeezes its manufacturing sector to address overproduction and environmental damage, small private-sector businesses are feeling the brunt of the pain while state enterprises remain largely unscathed.

The government is leading an effort to reduce output capacity for iron and steel and address rampant pollution in industrial areas, forcing massive plant closures. A recent visit to manufacturing areas near the capital highlighted the effect on private business.

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