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China is a veritable steel production country. In 1996, China surpassed Japan to become the world’s largest steel producer, and has maintained a momentum of rapid development since then. Today, China’s steel production has reached 800 million tons a year. However, the excessively rapid Chinese steel industry has begun to show excess production capacity. The prospects of domestic steel companies are in a dark shadow. Although most of the companies in recent years have shifted their development focus overseas, slightly eroding the excess capacity of steel, it has also led to the exclusion of countries such as the United States, Japan and Europe. At this time, Russia chose to step forward and take over China’s steel production.
Invest 2 billion! China’s steel industry moves to the Far East
Some foreign media reported that China is shifting its steel production to the Far East under the influence of “capacity reduction” in the domestic steel industry. Debon Guangdong’s Hong Kong company plans to build an agglomeration of steel deep-processing industry in the Primorsky Krai region. China is prepared to invest more than US$2 billion in this project. It is reported that the first phase of the project plans to build a steel production base with an annual output of 1 million tons, and will subsequently realize the integration of mining, smelting and production. When completed, the annual production capacity of the largest smelter in the future will exceed 5 million tons, while providing more than 50,000 jobs in the region.
In this move to Russia, Chinese companies followed the principle of mutual benefit and win-win. According to industry analysts, the shift of the Chinese steel industry to the Far East has many benefits for both parties. First of all, the location of the smelting project is close to the Northeast Heavy Industry Base, which provides a lot of production and transportation facilities; followed by Russia’s rich coal mines, in smelting Energy access can also bring convenience; in addition, the land price of the project area is much cheaper than China, and the cost is greatly reduced. Correspondingly, Chinese steel companies can improve the business environment and the lack of supporting facilities in Russia, as well as increase the local employment rate.
The United States, Japan, and Europe repeatedly suppress the Sino-Russian blocs to warm up
Of course, in addition to the above-mentioned series of favorable factors, there are still many reasons why Russia chose to take over China’s steel bills from international sources. After all, China and Russia are currently the two most unpopular countries in the new trade union of the United States, Japan, and Europe. As we all know, overcapacity in the steel industry is China’s most urgent need to resolve, and overseas deployment is one of the more effective methods. This was precisely the biggest reason why the United States, Japan, and Europe weighed on China. In mid-December, the three parties of the United States, Japan, and the European Union jointly issued a statement on trade issues, aimed at overcapacity in steel and other important industries and related technology transfer issues as a warning. China.
The plight of Russia has become even more serious. Under long-term multiple economic sanctions imposed by the United States and the European Union, it has always been gloomy and desperate. Therefore, it is very much looking for partners who can help them get out of difficulty. China’s steel production capacity, which has no place to resolve, happens to meet Russia, which has a large demand for steel. In addition, the U.S., Japan, and Europe that have only taken pressure have missed serious consequences. Russia’s continuous supply of energy is a powerful backing for the steel industry. Chinese steel companies are entering the Far East and are just like fish. The future of Sino-Russian steel industry has a monopoly of the world. The momentum of the market! By then, the retaliation of the new U.S.-Japan-EU trade union will only make it worse.
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