The Shaanxi provincial government has called for companies to reduce overcapacity by the end of this year.

The Industry and Information Technology Department said on Friday that cement production will be reduced by 900,000 tons and electrolytic aluminum production by 40,000 tons.

Shaanxi, one of China's major energy producing provinces, relies heavily on oil, chemical and coal production.

"In the past three years, oil and coal prices have fallen by more than 50 percent, which has dragged down Shaanxi's economic growth figures," Lan Jianwen, spokesperson at the Industry and Information Technology Department, said. "Low energy product prices will continue for a long period of time, which we have to adjust to."

Meanwhile, he said the overcapacity problem in industries such as mining, coal, chemical and construction equipment manufacturing are extremely serious. The government is making efforts to reform these sectors.