The Chinese government on Wednesday stressed the need for the country's coal mine enterprises to continue with mergers and acquisitions for the healthy development of the industry.

The statement was issued following an executive meeting of China's State Council, or Cabinet, which was chaired by Premier Wen Jiabao on Wednesday.

Low centralization, wasting of resources, environmental pollution, disordered mining and frequent industrial accidents are challenging China's coal mine industry, according to the statement.

China supports competent state owned or private coal mine enterprises to initiate mergers and acquisitions under the joint-stock system to push forward the development of a modern coal mining industry.

The government will also introduce preferential measures on finance and taxation to support the upgrade of safety technologies of the merged enterprises, said the statement.

Further, the central government will protect workers and investors' rights by law during the merger and acquisition process, it said.

The meeting also stressed the importance of developing the inland river transport system during the next decade.