Beijing extends steel sector consolidation by 10 years
China's restructuring plan to have the top 10 producers of the metal control at least 60 per cent of market has been moved to 2025
China, which is unlikely to realise an industry consolidation target that was set in 2011, has extended the time frame by a decade.
The goal, to have the nation's top 10 steel producers occupy at least 60 per cent of the market by the end of this year, did not go anywhere with the industry having in fact fragmented even more. Beijing now wants to achieve the goal by 2025.
China, the world's largest producer and consumer of steel, also aims to boost the production utilisation rate for its massive steel sector to more than 80 per cent by 2017, Xinhua quoted the Ministry of Industry and Information Technology (MIIT) as saying in a draft of a revised restructuring plan.
Analysts said whether this new target - aimed to enhance industry competitiveness - would be met, hinged on Beijing's success in making the economy and the running of state-dominated heavy industries like steel making more market-oriented.
"The main barrier for more progress in industry consolidation has been the fear of job and tax revenue losses of local governments," Xu Xiangchun, the chief analyst at Beijing-based consultancy Mysteel, told the South China Morning Post.
"For new jobs to be created and tax gaps to be filled, we need faster expansion of higher-end manufacturing and the services sector, but this takes time and it can only be initiated by the companies themselves ... if we let market forces play their role, the transformation will happen."