Economy, Business And Markets

Competitiveness Drives China Steel Export

Competitiveness Drives  China Steel ExportCompetitiveness Drives  China Steel Export

Several giant companies and key players in the steel industry attended the 5th International Steel Market Conference held on January 27-28 in Tehran.

A special guest in the ISMC 2015 was Yang Zunqing, the deputy secretary general of China Iron and Steel Association (CISA) and the Chairman of China Council for the Promotion of International Trade (Metallurgical Council). CISA is a national, non-profit organization founded in 1999, which has over 119 members and produces over 730 million metric tons of steel per annum – nearly half the global production. The following is an exclusive interview with Yang Zunqing.

Financial Tribune: What is your opinion about the ISMC 2015?

Yang: This conference provides a great opportunity for exchange of information between experts, enterprises, and engineers. It also provides an excellent platform for the foreign delegates to learn about Iranian industries. I found this conference very informative and educative.

How can such conferences help Iran to boost steel production?

I think conferences like this play an important role in creating mutual understanding between the Iranian and international industrialists. I noticed that very few Chinese delegates were present in the conference. We will encourage more participation by Chinese delegates in future conferences, which will help them better understand the true potential of Iran's steel industry and explore new grounds for mutual cooperation.

Noting that China has achieved 800% increase in steel production in only two decades, how could other countries learn from your experience?

China was producing steel at the rate of 100 million metric tons in 1996 and has now achieved production rate of more than 800 million metric tons. Over the past decades, China focused its efforts on developing the domestic steel industry; while at the same time, the country opened its gates to the outside world. Importing new technologies, advanced equipment and even management helped us boost our domestic steel industry. The country also allocated large sums of money to research and development and implementation of new technologies. I think the two major factors responsible for the success of China's steel industry were firstly, relying on our own capabilities and secondly, opening up to the world for import of modern technologies.

For the past few years, Iranian industrial officials have been trying hard to remove the obstacles faced by other countries in financing Iran's steel projects. What have been the main bottlenecks for China in financing the seven steel projects in Iran?

I think for any mutually conducted project to be successful, it should be in the best interest of both parties. If the projects are beneficial to the Chinese investors, I believe they will definitely take part in them by all means. Both the Iranian and Chinese companies must strive to create a win-win atmosphere. Of course at the state level, both governments should explore new ways to provide these companies with more opportunities and financial assistance.

The international steel industry often talks about "dumping policy" pursued by China. What is your assessment of the efforts by some countries to "confront China's dumping policy" by levying tariffs?

Exporting steel to other countries in large volumes is not a policy encouraged by our government. In fact, the Chinese government does not intend to export large volumes of steel as it is trying to control China's pollution. As you know, China is a big importer of iron ore which it uses to produce and export steel products. This process creates so much pollution in the country and increases China's carbon footprint. So, it would not be wise for the Chinese government to encourage export of steel products. I think China's current high level of steel export could be explained by the following reasons:  

Firstly, China's steel products are highly competitive in terms of both cost and quality. Following decades of construction boom in the country, China's steel industry has reached a level of proficiency that it can supply various types of steel products to any place in the world at highly competitive prices.

The second reason could be attributed to the increasing worldwide demand. Chinese products are highly sought-after due to their competitiveness. This is the market law of supply and demand and it is not controlled by anyone. Even though the Chinese government does not encourage this policy, the companies are trying to generate profits and there is no stopping them.

The third reason is that the Chinese steel companies are now seeking to capture the international markets, being no more satisfied with only dominating the domestic markets. They are currently testing the global markets and looking for opportunities to capture them in the long run.