China to restrict foreign investment in steel sector

It’s hard to know what announcements out of China really mean, and if they really mean them. Their workplace safety announcements haven’t amounted to any significant improvement in that area over the last few years, so is this any different? Hard to tell.

AFP via Yahoo! News

SHANGHAI (AFP) – China plans to restrict investment in its steel industry by barring foreign companies from taking controlling stakes, a blow to those wanting to tap the fast growing market.

The restrictions are contained in a new national steel industry policy due to be published next week, the China Daily said.

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As the world’s largest producer of crude steel, the Chinese government has spent billions of dollars on upgrading its steel makers such as Baosteel, currently the world’s sixth largest.

It is now keen to improve the quality of the steel it makes as it lacks the technology to produce value-added high-quality steel. In much the same way it has done in the car industry, it wants technological transfers, analysts said.

“The steel sector is one of the backbones of China’s steadily-growing economy. Therefore, it should not be controlled by foreigners,” Tian Shuhua, an analyst at China Galaxy Securities, said of the protectionist measures.

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