CCTV spoke to an official in southern China about why companies and local governments need to collaborate to tackle overcapacity.

"What's behind the overcapacity issue? Wrong strategies among both companies and local governments. Companies have been obsessed with quick money and governments have been only focusing on economic figures," said Xu Shaohua, Executive Vice Governor, Guangdong Province.

"There were also unsustainable policies and subsidies on certain industries. We need to cut off such wrong practices and make the market more efficient for companies."