A ban on overseas steelmakers owning more than 50 per cent of a mainland steel manufacturer is making it difficult to attract foreign investment and technology transfers to the industry, according to the chairman of Nanjing Iron and Steel United.
The restriction meant Nanjing Iron was unable to get a major foreign steel company to participate in its proposed restructuring of troubled Tieben Iron and Steel, chairman Xiao Tongyou said at the sidelines of the National People's Congress meeting.
Mr Xiao declined to name the investor but Xinhua had previously reported that Europe's Arcelor, now merged with Mittal to become the world's biggest steelmaker, was a potential investor.
'We had discussed with the investor about having them participate in Nanjing Iron and Steel United's acquisition of Tieben but they want to have a more than a 50 per cent stake,' Mr Xiao said. 'All foreign firms want to have a majority stake if they are to invest in Chinese steel firms.'
Successful foreign investments in mainland steel firms are scarce.
Arcelor Mittal last year agreed to buy a smaller 38.41 per cent stake in Shandong-based Laiwu Iron and Steel for 2.09 billion yuan. The deal was reportedly stalled as the central government considered the price Arcelor Mittal was prepared to pay was too low.