In 2012, China's steel industry faced not only development opportunities from structural adjustment, transformation and upgrading, but also severe challenges such as soaring costs, slowing demand growth, and the greatest pressure on energy conservation and emission reduction. China's steel industry has entered a meager profit era of "high cost and low profit", and it is expected that this meager profit operation will be difficult to change in the next two to three years.

 

Judging from the domestic situation, in the next few years, it will be a high probability event that China's steel industry will be restructured to increase the concentration. We suggest: to create a policy and legal environment for enterprises to carry out cross-regional and cross-ownership mergers and acquisitions; it is recommended to give preferential taxation and credit to enterprises engaged in industry mergers and acquisitions. From the perspective of external environment and policies, help enterprises reduce the cost and risk of enterprise mergers and acquisitions; it is recommended to encourage and support advantageous enterprises to play the role of leaders and organizers in eliminating backwardness and transforming and upgrading the iron and steel industry, greatly reducing the number of iron and steel enterprises. Several large iron and steel groups with international competitiveness will increase the industrial concentration.

 

In the new round of development, Baosteel's strategy, in the field of steel consumption resources and fuel, we have to make arrangements. We are no longer simply talking about a joint venture. In the Australian capital market, we acquired 15% of Aquila (sound) company. shares. We are going international and we have seen a completely different layout of resources ten years ago.

 

So far, China has adopted a policy of restricting the large-scale entry of foreign capital into Chinese steel enterprises. I personally think that with the deepening of transformation and development, the policy of restricting the inflow of overseas capital in the Chinese steel industry will gradually fade. The rapid growth of demand in the Chinese market is the reason why Chinese steel companies are slow to go global, especially during the period of rapid development in the past decade.

 

The internationalization I am talking about is not only the steel industry going out, but also the inflow of overseas capital. Chinese steel companies and Chinese capital will go out to invest in the establishment of steel production bases. Foreign capital and foreign steel industry will come to China to participate in the industrial restructuring and structural adjustment of China's steel industry. This will definitely come.