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What hinders China’s efforts in backward capacity elimination

(CMIC)
Updated: 2009-05-22 16:58

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Although it is imperative to build a well-established withdrawal mechanism for outdated steel capacity, without subsequent measures, the goal to eliminate backwardness is hard to materialize. This, according to Hebei Iron and Steel Group chairman Wang Yifang, is because smaller mills have a quicker response to the market changes than large mills’ and because local governments tend to act as a shield for the obsolete capacity, which is possibly an important contributor to local GDP and employment.

However, it is the environment indexes, rather than quality of products, that fail to meet national standards. Some products are popular in local markets, even from outdated facilities. So we simply cannot blame local protectionism for the reason for failure of scraping outdated capacity, executives from several mills say...

 

The full text is available in the May Issue ofChina Steel. Please visitpublications for more subscription details.