The proposed relocation of Shougang Group, also known as the Capital Iron and Steel Group Company, has raised concerns among similar Japanese and South Korean businesses. ?

 

Zhu Jimin, president of Shougang Group,?said in an interview with the Beijing Morning Post that the relocation would make the firm the first Chinese company to be located along the coast. This made transport convenient in line with international practices of cutting costs.

 

Because of the move, Japanese and South Korean iron and steel firms refused to provide advanced technologies to Shougang as they could become strong competitors. ?

 

After China's entry into the WTO, many iron and steel multinationals redoubled their efforts to establish themselves in the country. Mergers and acquisitions have followed the trends of the international market.

 

Zhu said the Chinese steel industry should speed up the process of mergers and acquisitions and his group would learn from overseas counterparts and join in world competition.

 

Shougang Group has increased overseas cooperation including projects in Australia, the world's main iron ore exporter, which is facing price pressure in ferrous minerals.

 

The steelmaker, Beijing's largest steel company and one of the worst polluters, aims to shut down all operations in the city within three years.

 

Under Shougang's current relocation plan they'll cut the annual output of their Beijing facilities from the current 8 to 4 million tons by 2008 and stop production in Beijing altogether by 2010.

 

By then all the production facilities will be moved to Tangshan in Hebei Province.

 

(CRI.cn February 9, 2007)