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Home >> Business
UPDATED: 21:11, May 31, 2007
Investment in China's steel sector picks up in first quarter
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Investment in China's steel sector rose 13.5 percent in the first quarter of 2007 over the same period last year, the highest growth rate in the past year, according to the nation's economic planning agency.

The investment totaled 36.9 billion yuan (4.8 billion U.S. dollars) between January and March, said a report from the National Development and Reform Commission (NDRC).

The authorities should pay more attention to preventing further investment hikes in the high energy-consuming industry, said the report.

China's net exports of crude steel equivalent reached 12.19 million tons, 340 percent higher than the previous year's first quarter.

"Exporting low-end steel products that devour a lot of energy and contaminate the environment is by no means acceptable," the report stated. It added the steel industry accounts for 15 percent of the country's total energy consumption and discharges 14 percent of the total pollutants.

The status of net steel exporter contradicted China's industrial policies and hindered the attempt to meet energy efficiency and pollution reduction targets and the steel industry restructuring, the NDRC said.

The Chinese government has set a goal of reducing energy consumption per unit of gross domestic product by 20 percent between 2006 and 2010, while pollutant discharges should drop by 10 percent.

Energy consumption, however, fell only 1.23 percent last year, less than one third of the annual goal of four percent.

As the world's biggest producer and consumer of steel, China has introduced a series of measures to curb the growth in steel exports this year.

China will impose five to 10 percent export tariff on more than 80 steel products mainly including common carbon steel wire, sheets and plate as of Friday, said the Ministry of Finance.

The country has removed exports tax rebates on 83 steel products while lowering the rate on 76 others to five percent as of April 15 and applied export license management to 83 steel products as of May 20.

"It may take a while before the measures take effect and current demand for steel remains high in the global market," said the report, indicating fast growth of steel export would continue.

The reports added China will strictly levy higher water and electricity bills and waste treatment fees on the steel plants to ensure further progress being made in energy saving and pollution reduction.

Source: Xinhua

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