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China's Steel Industry Preparing for WTO Entry
Chinese entrepreneurs and analysts attending an ongoing steel congress agree that China's entry into the World Trade Organization (WTO) will help improve the efficiency of domestic metallurgical plants.
Dong Yizheng, senior advisor to the State Administration of Metallurgical Industry (SAMI), said at "Steel 2000" that China's WTO entry may not bring about too much impact on the domestic steel market, as most of the world's leading steel exporters focus on high value-added products while China still needs a large amount of ordinary steel products.
Meanwhile, China's top steel producers such as Shanghai Baoshan Steel Group Corp. and Capital Steel Group Co. have already entered the global steel market. WTO entry will bring both challenges and opportunities for steel producers.
Xie Qihua, president of Baoshan Steel, said China's entry into WTO will facilitate his firm's reforms, which will narrow the gap between the company and international giants.
Costs of imported materials will be reduced and international operations will be improved for the Chinese producer, Xie added.
China's steel industry still lags behind developed countries in terms of technology, equipment, product quality, productivity, and services.
The huge potential in China's steel market has attracted the attention of many steel producers around the world, said Liu Jinghai, deputy director of the Metallurgical Industry Economic R& D Center under SAMI.
It is estimated that huge supply of steel products from foreign countries may cut down the market share of China-made products in the short term.
Dong Yizheng, who has played an active role in helping Chinese loss-making metallurgical enterprises out of difficulties, firmly believes in the huge potential of Chinese steel producers. "The underlying factor in reforms is to make them self- motivated, and prompt them to reduce costs and enhance the quality of their products."
Smaller producers should focus on ordinary products such as steel for construction within the domestic market, said Dong. Baoshan, China's largest steel producer, has pledged to produce more high quality and high value-added products. China is the world's largest steel producer, but it still has to import seven million tons of steel products each year. China's metallurgical industry will focus on developing and producing more quality steel products in the next several years. Wu Xichun, chairman of China Iron and Steel Association, said China's industrialization process will fuel its steel industry, which is instrumental to the country's development.
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