AsiaNews Magazine Jan10-16,2014 ( Jan 1-7,2014) | Page 28

BUSINESS

January 10-16, 2014

Thus, the new drive to curtail
capacity is likely to have a
small impact in the short term
and little if any impact in the
medium and long term, she said.

Shipbuilding

China's shipbuilding sector
has stagnated in 2013, and
things won't improve in 2014.
The country will continue
to lag behind its foreign
competitors as prolonged
excess capacity continues to
cramp industry profit and
drive smaller shipyards out.
Zhang Guangqin, president
of the China Association of
the National Shipbuilding
Industry, said that heedless
expansion of capacity and
product lines have severely
hurt the industry's health.
"Surplus capacity of the world's
shipping industry has mounted
since the global financial crisis in
2008. The estimated overcapacity

of the sector may reach as high as
20 per cent in 2013," Zhang said.
"Under the circumstances, it
will take at least five years to
digest the surplus capacity in
China's shipbuilding sector."

Steel

The State Council plans to cut
80 million metric tonnes of steel
production capacity in five years,
which is aimed at improving air
quality and helping an industry hit
hard by destructive competition.
"China should not add any single
new steel project for any reason,"
said Li Xinchuang, head of the
China Metallurgical Industry
Planning and Research Institute.
He called the ban a must in
order to help the environment
and put an end to the unfair
competition caused by steel
mills that haven't installed
emission-reduction equipment.
To achieve the target, Hebei
province, the largest steel

producer in China, will cut steel
capacity by 60 million tonnes by
2017, which means that one-third
of the province's steel capacity
will be shut down by then.
The local government
said that its goal is to reduce
15 million tonnes of crude
steel capacity in 2014.
"Hebei will destroy blast
furnaces and cut the power
supply to production
lines that are tapped for
shutdown, which means the
steel companies cannot put
them back in production
again," said Lu Huaying,
an analyst with Lange Steel
Information Research Centre.
She said the central
government has been
encouraging companies to
save energy and cut emissions
for years, but the temporary
measures resulted in failure when
steel mills started to produce
again after authorities' checks. ¬