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Luo Bingsheng, board chairman of the Shougang (Capital Iron and Steel) General Corporation, on Tuesday denied the long-time rumor that his company might be moved out of the national capital, Beijing.
"It is not feasible to move the whole Shougang out of Beijing," he told a group of Chinese Academy of Engineering members led by the academy president Xu Kuangdi, who are helping the company draw up plans for future development.
Luo confirmed that some experts had raised the proposal. "But it would lead to a series of problems," he noted.
Resettlement would cost almost 40 billion yuan (US$4.82 billion) which the company could not afford and might end up as a financial burden on the state, he said.
Moreover, resettlement was not necessary, because of the over-supply in China's steel market, he said.
Meanwhile, Shougang relocating could possibly reduce local revenue in Beijing. The company generates 25 billion yuan (US$3 billion) in sales annually, including two billion yuan (US$240 million) handed over to local revenue.
The company has 120,400 employees. If it were relocated, it would be very difficult to help them find new jobs. "It may affect social stability in the capital," he warned.
(Xinhua News Agency August 21, 2002)
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