China plans to lower the number of steel plants from 800 to 200, through mergers and acquisitions as well as shutting down of some substandard mills, an official from the Ministry of Industry and Information Technology (MIIT) said Tuesday.

The move aims to promote restructuring, energy efficiency, emission reductions, and change of the development mode in the iron and steel industry.

According to regulations released by MIIT July 13, crude steel manufacturers, which produce less than 1 million tons and high-end steel manufacturers, which produced less than 300,000 tons in 2009 would be shut down.

The regulations also set standards for steel manufacturers in terms of product quality, environmental protection, energy consumption, security, corporate responsibility, and scale of production.

"To conduct mergers and acquisitions in the steel industry is a must. The concentration of China's steel industry is far from ideal. This new move of the government may help to improve the situation", Wang Guoqing, a researcher at Lange Steel Information Research Center, told the Global Times.

In 2009, the total production capacity of the country's top five steel makers only accounted for 29 percent of the total production, and the number for the top 10 steel makers is 44 percent.

The figure in developed country is usually well above 50 percent, Wang said.