China has ordered companies in 19 sectors including cement and steel to slash production capacity as growth in the world's second largest economy slows.

Beijing's industry ministry ordered around 1,300 firms to shut down outdated facilities by September and eliminate excess capacity by year-end, state media said Friday.

In China's partly state-directed economy, companies often fail to heed economic signals by cutting output even as their performance weakens or turns loss-making, analysts say.

"The government is serious in its efforts to restructure the economy and is prepared to tolerate the necessary pain," Zhang Zhiwei, an economist with Nomura Securities, wrote in a research note.

"This reinforces our view that aggressive policy stimulus is unlikely in 2013 and that growth should trend down," he said.

The ministry on Thursday ordered 527 cement producers to slash nearly 93 million tonnes of excess capacity and 24 steel makers to cut seven million tonnes of capacity, according to a statement on its website.

Other industries affected include glass, paper and copper, it said.

Analysts said the move could hit already weak manufacturing activity, which contracted to a 11-month low in July, according to HSBC's preliminary purchasing managers' index.

"Manufacturing data will fluctuate at low levels with downside risks as China continues to eliminate overcapacity and reduce inventories," Minzu Securities analyst Xu Yiding told Dow Jones Newswires.

Shares of companies involved fell on Friday. Cement producer BBMG lost 3.33 percent, while Inner Mongolia Baotou Steel Union fell 2.03 percent.

China's economy is already slowing, expanding 7.5 percent year-on-year in the April-June period, down from 7.7 percent in the first quarter and 7.9 percent in the last three months of 2012.

The government has set a full-year growth target of 7.5 percent for 2013.

China's cabinet on Wednesday unveiled a package of measures, dubbed a "mini-stimulus" by economists, to boost growth by scrapping some taxes for small firms and speeding up railway investment.

The nation's top economic planner on Thursday also introduced rules to facilitate financing for small firms and encourage the development of financial institutions to cater to their funding needs.

Despite persistent sluggishness in the domestic economy, China's finance chief earlier this month ruled out the possibility of introducing any major stimulus this year and said the country would focus on structural reforms.

"This year, China will not introduce any large-scale financial stimulus policies but will fine-tune its policies to promote economic growth and employment," finance minister Lou Jiwei said.

Sovereign wealth fund CIC boasts 10.6% return in 2012
Beijing (AFP) July 27, 2013 - Sovereign wealth fund China Investment Corp (CIC) boasted a 10.6 percent return on its global investment portfolio in 2012 according to the company's annual report.

The rise is in marked contrast to the previous year when the fund suffered a 4.3 percent loss, the lowest return since it was launched in 2007.

By the end of 2012, the company's total assets stood at $575.2 billion, compared to $482.2 billion by the close of 2011, the report which was put online Saturday stated.

The figure brings the company's accumulative annualised rate of return since its establishment to five percent.

The fund was set up six years ago with $200 billion to make better use of China's colossal foreign exchange reserves which now amount to $3.4 trillion.

After initially posting 11.7 percent rises in 2009 and 2010, the fund fared poorly in 2011, hit by difficulties in the global economy and the worsening eurozone debt crisis.

In a statement released with the annual report, Ding Xuedong, CEO and chairman of CIC, said intense market research and effective risk management helped the fund see a good return by the end of the year.

"In 2012, global financial markets remained in thrall to continued high risks, low yields and high volatility, hallmarks of the post-crisis era," he said.

"Thanks to intensified market research and timely adjustment to optimise our portfolio mix, we promptly seized the window of opportunity on the back of a market turnaround in the second half of the year."

Former chairman and CEO Lou Jiwei said the young fund had "come a long way" in difficult global circumstances.

"As China's young sovereign wealth fund, we set sail in turbulent times and navigated uncharted waters with courage and competence," he said in a statement released with the annual report.

CIC has increasingly invested in the stock markets. By the end of 2012, shares in listed companies accounted for 32 percent of its overseas portfolio compared to 25 percent the year before.

Company spokeswoman Liu Fangyu told Xinhua news agency the company also secured a state cash injection of $19 billion in 2012 in addition to $30 billion added in 2011.

Other sectors the fund have recently invested in included buying up a 10 percent stake in Britain's Heathrow Airport and 5.3 percent of the Moscow stock exchange.