China's weak coal market mirrors slowdown, transition (2)

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China's weak coal market mirrors slowdown, transition (2)

(Xinhua) 19:07, August 06, 2013

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Currently, traditional heavy industries, like steel and shipbuilding, are faced with unprecedented challenges of excess capacity as sluggish global economic growth has dented demand, said Li.

Thirty-seven of China's 49 major steel makers reported losses in the Jan.-May period, data from the China Iron and Steel Association showed. The steel mills face operation pressures with falling prices and rising inventories.

The companies should work out new solutions as China will continue to cut its reliance on highly-polluting and energy-guzzling industries, said Zhang Weiguo, head of the economics research institute of Shandong Academy of Social Sciences.

"Facing rising debts, weak demand and price falls, the heavy industries should innovate and transform their growth model rather than wait for bailouts," Zhang said.

The Chinese government is paying more attention to the transition of the economic growth model, acknowledging that sustained economic stimulus can not completely tackle the expansion issues, Zhang said.

At a conference in mid-July, Premier Li Keqiang said that China's economy has begun a new phase as it must rely more on economic transformation and upgrading. The government should coordinate efforts of stabilizing economic growth, promoting restructuring and advancing reforms, he said.

Many companies are making changes to cope with the hard market conditions.

Huanghai Shipbuilding Co., Ltd. has 169 vessels being built or ordered with delivery dates until 2014.

"We have stepped up research and development on new products to help compete for customers and therefore we have received plenty of orders this year," said Zhao Jianping, president of Huanghai Shipbuilding Co..