Not Practical for Shougang Group to Move out of Beijing

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Last updated at: (Beijing Time) Wednesday, August 21, 2002

Not Practical for Shougang Group to Move out of Beijing

Shougang Group (Capital Iron and Steel Company)president Luo Bingsheng said at the group's technology innovation conference that it is not practical for the group to move totally out of Beijing.

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Shougang Group (Capital Iron and Steel Company) president Luo Bingsheng said at the group's technology innovation conference that it is not practical for the group to move totally out of Beijing.

Some experts proposed that the group move out of Beijing's Shijingshan District in the "10th Five Year Plan" period. Luo said, the group will face the three problems if it has to move out.

First, it is almost tantamount to building another steel company if moving the whole group out of Beijing. The primary expenditure for the removal is estimated at 40 billion yuan, in which the first problem is that the group could hardly afford such a huge cost, so the burden has to be shifted to the state, an increase for the country's financial burden.

What's more, even if the fund problem could be solved, it is not necessary to move the whole group out in such a condition when the steel production supply exceeds demands in the whole country.

Secondly, the group's annual sales revenue is at 25 billion yuan. The group contributes a total of 6 billion yuan to the society and 2 billion yuan to the state every year, some 2 billion yuan is used for employees' salary and insurance and another 2 billion yuan for welfare, training and other expenditure.

If the group moves out of Beijing, it does no contribution to the city at all.

Thirdly, by the end of 2001, the group had some 120400 employees and some 55000 retired people. If it totally moves out, nearly 100000 employees will become jobless, this will incur a direct influence on those people's lives.

Luo concluded that the scheme is infeasible. He said, facing a life-and-death choice for the group, it needs a correct decision based on analyses of factors from all aspects.

By PD Online Staff Li Yan

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