China's largest steel manufacturer says its earnings will grow 15 per cent this year in an apparent recovery from last year's slump. Zhang Yanlin , chairman of Shougang Holding (Hong Kong), Shougang Corp's investment vehicle in the territory, said the steel giant made a net profit of 4.2 billion yuan (about HK$3.9 billion) last year, largely unchanged from 1994. 'We are planning to have a 15 per cent rise in earnings this year, calculated on the same basis as last year,' he said. Shougang Corp's contract responsibility system, which allowed it to pay a fixed amount of income tax and use the balance at the discretion of the management, expired last year. The system's effective tax rate was usually lower than the statutory 33 per cent level, which the group has paid since the beginning of this year. Mr Zhang said the group's actual production would not increase this year and would remain at eight million tonnes, as it had shifted its focus to quality and efficiency away from quantity. Shougang Corp had lowered its triangular debts, including both accounts receivable and accounts payable, by two billion yuan to five billion yuan at the end of last year. Mr Zhang said this was achieved through an increase in production, thereby generating more sales, and a disposal of inventories and obsolete facilities. He said that China Ocean Shipping (Group) Co was discussing co-operation with an enterprise under the banner of the Ministry of Metallurgical Industry on shipping and minerals exploration.