Risks or Challenges? China's Steel Industry New Look

2019-02-27


Risks or Challenges? China's Steel Industry New Look

 

Zhuzhou UKO Precision Carbide Co.,Ltd has always been paying attention to the steel industry market domestically and globally as its products mostly relate to various types of steel or alloy.

 

Recently, U.S. President Donald Trump said the United States was set to impose 25 percent of tariff on steel imports products and 10 percent on aluminum. These incidents have made the steel industry the main battlefield of trade frictions between China and the United States. Will Sino-US trade frictions have a negative impact on Chinas steel industry? What opportunities and challenges will China's steel industry face in the future?

 

 

In 2017, China's steel consumption accounted for about 50% of the global steel consumption, and Chinas steel industry has the world's largest domestic demand market. Why is China's steel market so competitive? What is the future development of Chinas steel industry? How should other developing countries develop their own industry?

 

Competitiveness of Chinas steel industry

Chinas steel industry is one of the most globally competitive industries in the manufacturing sector and has achieved 5G: Good Product, Good Price, Good Scale, Good Service, and Good Brand. The complete industrial system and the abundant talent resources have made the industry the flagship of the aircraft carrier. For other developing countries willing to learn from Chinas development experience, they need to firstly guarantee a large market, advanced technology and equipment, excellent human resources, and a stable economic environment.

 

Three major trends in the development of the global steel industry at the new phase: the advancement of new low-carbon technology research and development in the context of global low-carbon development, the industrial transformation and upgrading under the background of excess global steel capacity and increasing trade friction, and the international industrial cooperation represented by the Belt and Road Initiative.

 

New opportunities for China's steel industry

China should take the advantage of the global trend and seize new opportunities for industry development.The iron and steel industry will play a greater role in improving product quality, innovating enterprises, and improving environmental protection levels. Meanwhile, China will further stimulate the vitality of state-owned steel enterprises by developing a mixed-ownership system. Furthermore, China will utilize the historic opportunity brought by the One Belt One Road Initiativeto seek new ideas for global cooperation.

Future of Chinas steel industry

China will highlight the high-quality development and the new normal and supply-side structural reform in the future. The supply-side structural reform clarifies that China will enter the era of cutting off production capacity, and it could effectively solve the low-quality steelproblem that has plagued the steel industry for many years. In addition, the supply-side structural reform could also promote the innovation of companies to drive effective supply, solving the global iron and steel overcapacity issue with Chinas wisdom.

 

The total exports of steel from China to the U.S are very small, so Chinas steel industry will be little affected. America used to see China as a competitor, but now sees China as a rival. The difference between the two terms is that rivals compete without rules. Opening the global market could benefit the world, but now America has lost its patience.